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STAR REPORT: House of Reps Ad-Hoc Committee Report to probe N628million Contract Award For Renovation of Speaker/Deputy Speaker Residences
Report of the House of Representatives nine man ad-hoc committee to probe the N628 million contract award for the renovation of the official residences of the Hon Speaker and Deputy Speaker of the House.
1.0 INTRODUCTION In August 2007, while the House of Representatives was on recess, there were publications in the National Newspapers that contracts were awarded for the renovation and furnishing of official residences of the Hon. Speaker and the Deputy Speaker as well as purchase of 12 vehicles for principal officers for the sum of N628,843,418.20 (Six hundred and twenty-eight million eight hundred and forty-three thousand, forty hundred and eighteen naira and twenty kobo only). On Wednesday, 5th September, 2007, a motion of privilege was raised by the Minority Leader on the alleged contract pursuant to Order V, Rules 1(b) and 4, of the House Rules. The House deliberated and resolved to set up a 9-man independent ad-hoc Committee, cutting across party lines to look into the matter. The Committee is comprises the follows: 1.Hon. David Onobi Idoko PDP Chairman 2.0 TERMS OF REFERENCE As contained in the Votes & Proceedings of Wednesday 5th September, 2007, the terms of reference of the Ad-Hoc Committee are as follows: 1.Examine the award of contracts for the upgrading of the official residences of the Speaker and the Deputy Speaker; and 3.0 METHODOLOGY
In view of the need to adequately address its terms of reference, the Committee employed several methods in gathering information and facts in the course of its assignment. Among these are: i. Regular meetings of Members on a daily basis; v.Oral and documentary evidence were obtained through open hearing from the followings: a. Leadership of the House:
b. National Assembly Management: •Director of Works and Estate c. Corporate Affairs Commission d. Federal Capital Territory Administration e. Victogenuel Nigeria Ltd f. Lee Development Nig. Ltd g. Stateco Nig. Ltd (The Committee in its considered opinion ruled that Stateco cannot be represented by counsel)
4.0 SUMMARY OF FACTS On the basis of the documents submitted to the Committee and oral testimonies obtained from witnesses, the facts of the investigated contracts are itemized as follows: (i) The contracts for the renovation and furnishing of the official residences of the Hon. Speaker and Deputy Speaker were approved by the body of Principal Officers at a meeting held on the 12th July 2007. (ii) The contracts for the supply of vehicles to Principal Officers of the House were also approved by the body of Principal Officers at that same meeting. (iii) The meeting of the body of Principal Officers was summoned through a Notice of Meeting dated 11th July 2007, and was addressed to 9 principal officers, Chairman Ad Hoc Committee on Welfare and 7 Senior Management staff of the National Assembly. (see Annexure I & III) (iv) The meeting was scheduled for 12th July 2007 at 1.30 pm, but it commenced earlier at 12 noon on the same date on the instruction of the Hon. Speaker, Chairman of the body of Principal Officers. (v) The meeting was attended by only 4 Principal Officers (Hon. Speaker, Hon. Deputy Speaker, Chief Whip, and Deputy Majority Leader), Chairman of Welfare Ad-Hoc Committee, and 8 Management Staff of the National Assembly. (see Annexure III) (vi)6 Principal Officers were not at the meeting; some of them stated that they did not receive the notice of meeting. The principal officers not at the meeting were the leader of the House, Deputy Chief Whip, Minority Leader, Minority Whip, Deputy Minority Leader, and Deputy Minority Whip. (vii) The meeting approved award of contracts as follows: b. Renovation of Deputy Speaker’s residence to M/S Lee Development Nig. Ltd at the cost of N90,296,225.25 (Ninety million, two hundred and ninety-six thousand, two hundred and twenty-five naira and twenty-five kobo only) c. Supply of 10 No. Toyota Land Cruiser to M/S Kymco Motors Co. Ltd at the cost of N123,000,000 (One hundred and twenty-three million naira only), and M/S Bras Ventures Ltd at the total cost of N49,600,000.00 (Forty-nine million, six hundred thousand naira only). d.Furnishing of the official residence of the Hon. Speaker to M/S Victogenuel Nig. Ltd at the cost of N 71,895,000.00 (Seventy-one million, eight hundred and ninety-five thousand naira only). e.Furnishing of the official residence of the Hon. Deputy Speaker to M/S Lee Development Nig. Ltd at the cost of N55,200,000 (Fifty-five million, two hundred thousand naira only). (viii)An advance payment in the sum of N53,741,743.00 (Fifty-three million seven hundred and forty-one thousand, seven hundred and forty-three naira only) representing 25% of the total contract sum was paid to Messrs Stateco. Nig. Ltd. in respect of the renovation and furnishing contract for the Hon. Speaker’s Residence, which was covered by a Fidelity Plc bank guarantee for a value of N181,982,623.20 (One hundred and eighty-one million, nine hundred and eighty-two, six hundred and twenty-three naira twenty kobo only). (ix)The Committee visited the official residences of Hon. Speaker and Hon. Deputy Speaker where Members a.Chief Electrical Engineer; (x)The Deputy Director Estate and Works Department confirmed the receipt of the Committee’s letter concerning the suspension of work in the two official residences and Members reiterated the Committee’s decision that work on the residences should be suspended, pending the outcome of the Committee investigation. It was further directed that the stop order be pasted on the walls of the affected Residences if contractors could not be reached. (xi)The execution of all the contracts in question remain suspended pending the outcome of this investigation. 5.0 FINDINGS (EVALUATION & ANALYSIS) 5.1 Review of Relevant Statutes Governing Award and Execution of Contracts. The contracts in question involve the procurement of goods, works and services by the National Assembly which fall within the ambit of Public Procurement Act, 2007 specifically under Section 15(1)(a) which covers all procurement of Goods, Works and Services carried out by the Federal Government of Nigeria and all procurement entries which include: a. Section 16(1)(a)-(g) lays down the fundamental principles for procurement. (Annexure 33 attached) b. Section 40(1) – (4) on Restricted Tendering (Annexure 33 attached) d. Offence Relating to Public Procurement, Section 58(1)(4-5)(9-10)(12). (Annexure 33 attached) 5.2 Review of all documents relating to the award of the Contracts to Ascertain Compliance with the Guidelines. The Ad-Hoc Committee mandated to investigate the contracts began with two letters dated 6th June, 2006 referred to as Annex 19A and 19B signed by one Idris M. Mahdi for Clerk to the National Assembly addressed to the Executive Secretary, Federal Capital Territory Administration, Abuja. The letter requested for the “furnishing of official residence of the Hon. Speaker of the House of Representatives at Apo Legislative Quarters, Abuja” and “Taking Over of Deputy Senate President and Deputy Speaker’s Residences at Apo Legislative Quarters, Abuja”.(See Annexure 19a & 19b). In response to the said letters referred to above, the Executive Secretary/Chairman, FCT Transition Committee Engr M S Alhassan, FNSE, by a letter dated 15th June, 2007 addressed to the Senate Leader, National Assembly, Abuja and copied to the Clerk to the National Assembly informing National Assembly Management that the general provisions in the FCT 2007 budget are inadequate and therefore cannot accommodatethe cost of furnishing the houses of the officers under consideration. The Executive Secretary further suggested that National Assembly should consider other ways of funding the project. (see Annexure 19c attached). 5.2.1 The Committee having gone through Annexure 16 observed a typographical error on the second page of the document under a sub-heading scope of work “S(i)” Mercedez Benz 5320 which is suppose to mean Mercedez Benz S320. While scrutinizing the documents, the Committee also observed as follows:
iii.That the minutes of meeting of the body of principal officers of the House of Representatives held on the 12th July, 2007 at the office of the Honourable Speaker, National Assembly Complex, Three Arms Zone, Abuja, had underlisted persons in attendance: Present 1. Hon. PatriciaOlubunmi Etteh iv.That the minutes reflected neither “Apology” nor “Absent”. Also no explanation was given as to why some Members were absent without apology. It was also observed that the meeting commenced one and a half hours earlier than the scheduled time. v. The decision reached at the meeting shows that contracts were approved for award as follows: a. Renovation of the Official Residence of the Honourable Speaker’s Residence to M/s Stateco. Nig. Ltd in the total sum of N238,852,192.95; b.Renovation of Honourable Deputy Speaker’s Official Residence to M/S Lee Development Nig. Ltd in the total sum of N90,296,225.25;
c. Supply of motor vehicles: (i) 10 Nos. of Toyota land Cruiser by Kymco Motors co. Ltd in the sum of N123,000,000; (ii) 2 No. Mercedes Benz car S.320 (Black) by M/s Bras Ventures Ltd in the total sum of N49,600,000;
d.Furnishing of the Hon. Speaker’s Residence to M/S Victogenuel Nig. Ltd in the sum of N71,895,000.00; and e. Furnishing of the official residence of the Hon. Deputy Speaker of the House of Representatives to M/s Lee Development Nig. Ltd in the sum of N55,200,000.00 vi.That four out of six Members endorsed the Minutes of the Meeting and the remaining two did not sign against their names. (see Annexure 8) vii.That Annexure 5-8, were memoranda presented at the meeting as follows: 5.2.2Memo No. 1 – Memorandum for the Renovation of the Official Residence of the Hon. Speaker, Apo Quarters, Abuja (Annex V) Item No. 6a: Claims that the residence of the Hon. Speaker was last renovated in 1999 is in direct conflict with the submission of the Executive Secretary of the FCTA, who claimed it was last renovated in 2005 as indicated in Annex 37 N16.7m was spent on roofing works and replacement of wooden doors). Item No. 6b: Claim that advertisement was placed on the notice board of the National Assembly is in direct contradiction with the oral testimony of the Secretary Tenders Board who said there was no advertisement at all. Item No. 6c: Claim that analysis and vetting exercises were carried out by professionals in the Estate and Works Department. This is incorrect as only an appraisal was carried out on the various contract sums and based on that a decision was reached. 5.2.3 The basis for arriving at the figure of N238,852,192.00 being the total contract sum for the renovation of the Speaker’s house has not been established. 5.2 .4 There is no budgetary provision for this expenditure. 5.2.5 Stateco. Nig. Ltd Bill of Quantities (BOQ) was vetted by the Estate and Works Department without them having any in-house BOQ or the necessary drawings that will give them a clear picture of the situation.
5.2.6 The BOQ of Stateco. Nig. Ltd is full of lump sum (prime cost and provisional sums) reinforcing the belief that most of the bills were based on assumptions. 5.2.7 The BOQ of Stateco. Nig. Ltd just addressed works concerning the main house, fence and external works. 5.2.8 The format of the BOQs of the renovation of the Speaker’s residence is different from each other, proving that they cannot be from the same source. (see BOQ attached to Memo V and Annexure XIII) 5.2.9 Date signed by the Clerk of House of Representatives on the memorandum was dated 9th July 2007. 5.2.10 Memo No. 2 – Memorandum for Renovation of Deputy Speaker’s Official Residence at Apo Quarters, Abuja (Annex VI) Item No. 2 The assertion that the house has been occupied since 1999 is inaccurate as the residence was only commissioned March 2006 and nobody has ever lived in the residence (see Annexure XIXb)
Item No. 3: Claim that advertisement was placed on the notice board of the National Assembly is in direct contradiction with the oral evidence given by Secretary Tenders Board who said that no adverts were placed. Item No. 4: Claim that analysis and vetting exercises were carried out by professionals by the Estate and Works Department is incorrect as only an appraisal of the contract sum was made not tender analysis at arriving at a decision to award the contract sum of N90,296,225.25 to M/s Lee Development Nig. Ltd. 5.2.11 The Committee finds that the 3 companies that bided for the renovation contract of the Deputy Speaker’s residence i.e. •Lee Development Nig. Ltd 5.2.12 The Committee noted that only Lee Development Nig. Ltd has a BOQ but they all had Hon. Speaker’s minutes to the Clerk to process on their covering letter. 5.2.13 The Committee also noted that the time of completion on the Agreement (Annex XXXVa) is 3 weeks. This is at variance with approved 8 weeks completion period by the Body of Principal officers (Annex III) and the award letter (Annex IV) 5.2.14 The memorandum of the meeting was dated 9th of July, 2007. All the quotations of the companies were detailed in the memorandum and a recommendation made for the award of the contract for the renovation of the Deputy Speaker’s residence to Messrs Lee Development Nig. Ltd for the sum of N90,296,225.25, even though none of the companies’ bids were in process until the 11th of July. All the three bids were minuted on the 11th July 2007 by Madam Speaker with instructions to the CNA to Process. 5.2.15 Memo No. 3A – Memorandum for the Supply of 10 No. Toyota Land Cruiser VXR 470 EFI Engine, Full Option, Leather Seat, Air Condition, Air Bag, and Refrigerator to the House of Representatives (Annex VII) Three companies bided for the contract to supply 10 No. Toyota Land cruiser VXR. They are: 1.Kymco Motors Co. Ltd - 3. NIA Nigeria Ltd
5.2.16 The Committee observed that the memorandum for the meeting was prepared on the 3rd of July. 5.2.17 Item 4 in Annex VII states, “after a careful study of the quotations received, it was evident that the one from M/s Kymco Motors Co. Ltd appears most competitive in the unit price of N12,500,000 only and accordingly recommended for the contract.” The quotation from Kymco Motors was dated 9th of July 2007. The quotation from Ausu Nig. Ltd was dated 11th July 2007. The quotation from NIA Nig. Ltd was dated 12th July 2007. So, how was the bid figures reflected on Annex VII in respect of the purchase of 10 No. Toyota land cruisers obtained by the 3rd of July 2007? Evidently there was a prior knowledge of the figures of the bid document before the submission.
5.2.18 Memo No. 3b: Purchase of Official Vehicles for the Presiding Officers of the House of Representatives (Annex VII)
The Committee observed that the body of Principal Officers approved S320 model however there was a change to Mercedes S550 at the same cost. There is no explanation as to how this change came about. (see Annexure XXIII) 5.2.19 Memo No. 4 – Memorandum for the Furnishing of the Residence of the Deputy Speaker (Annex VIII) 3 companies bided for the furnishing contract of the official residence of the Hon. Speaker, namely: •M/s Bulktrade & Investment Co. Ltd and Homelink Holdings presented a detailed breakdown of items and costs of items they are bidding to supply. All the items are for the main house and security post and boys quarters. The letter from Victogenuel Ltd also made reference to such a breakdown of items but the Committee were not provided with it. • The Committee observed that the Speaker was the first person to minute on the letter addressed to the Clerk to the National Assembly in respect of the furnishing of the residence of the Hon. Speaker. The letters are from:
We also observe that Madam Speaker minuted to the Clerk on the letters of Homelink Holdings Ltd, Victogenuel Ltd and M/s Buldtrade & Investment Co. Ltd on the 11th July 2007, but the Memorandum (Annex VIII) was prepared on the 10th July, thereby raising a question as to how the details of the bids were accessed even before the initiation of the processing of the bids. 5.2.20Memo No. 5 (Page 9 in Annex III). The claims in the Memorandum that the last furnishing of the mansion was done at the inception of the last legislature is clearly inaccurate as the house was never furnished or occupied since it was commissioned in March 2006. We also observe that according to information from Corporate Affairs Commission, D-Crew Limited could not be located in the database of the Commission. This suggests that the company has not been registered.
(1) De-Crew Ltd, minuted by the Speaker to the Director of Works on 13th July 2007. (2) CNO Development Ltd, minuted by the Speaker to the Director of Works on 13th July 2007. (3) MP Associates Ltd, minuted by the Speaker to the Clerk to House of Representatives with the following instructions: “Pls process as approved by the body of principal officers and the management of the house,” dated 17th July 2007. 6.0 CONCLUSION 6.1 Based on the Committee’s evaluation, the Committee concluded that due process was not completely followed in the awards of the contracts based on the following: i. The tender was not advertised; ii.No in-house Bill of Quantities and drawings (Architectural, structural, electrical and mechanical) as such, there was no basis for arriving at the approved contract sums; iii.No specific budgetary provision for renovation and furnishing of the official residence of the Speaker and Deputy Speaker in the 2007 Budget; v.The procedure for the award by the Body of Principal Officers on the 12th July 2007 shows major act of omission and disregard for laid down procedure; vi. The memoranda for the award of contracts presented at the Meeting of the Body of Principal Officers of 12th July 2007 were raised before some of the quotations for the jobs were processed; viii. Some of the companies that sent quotations were not registered with Corporate Affairs Commission. They therefore lacked capacity to compete for the contracts in question since the law does not recognize them as persons; ix. It appears that some principal officers were excluded from the meeting of 12th July 2007 by not serving them notice for the meeting particularly the Minority Leadership; x.The contract sum of N238,852,152.00 in respect of the renovation and furnishing of the residence of Speaker was for the main house and not inclusive of cluster of structures in the compound; and xi.All quotations relating to the renovation and furnishing contracts directed to the office of the Speaker and those directed to the office of the Clerk to the National Assembly were first acted upon by the Hon. Speaker for the attention of the Clerk to the National Assembly directing him to process. Submitted to this Honourable House, please. COMMITTEE MEMBERSHIP 1. Hon. David Onobi Idoko - Chairman Receive Email Updates
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