How to get a government contract in Nigeria

Across the nation, billions and trillions of naira are spent annually on a variety of maintenance and development projects. While some are enormous, others are small, and small businesses are allowed to bid for them. 

Nigerian government contracts are usually a source of great wealth for anyone who can get them. As such, they are highly competitive, and only the best in the industry can win them. It may be hard, but it is not impossible. If you follow the right steps, you will be able to bag a government contract.

It might be difficult for many contractors in Nigeria to get contracts from the government. Typically, a rigorous bidding process is used; hundreds of companies submit their ideas, many are eliminated, and the remaining companies compete with several highly qualified companies for the prize.

Numerous factors are taken into consideration throughout the selection process, and if you’re interested in learning more, then continue reading. 

Types of contractors 

Here are the types of government contractors in Nigeria:

1. Direct contractors

Those who successfully bid for contracts directly are known as direct contractors. These organizations are typically well-connected but lack the technical expertise to carry out the contracts; instead, they have a large network of smaller businesses and independent contractors with the necessary skills.

When direct contractors submit bids for contracts, they often offer very high prices to pay the subcontractor’s fee and turn a healthy profit.

These are mostly multinational corporations and large corporations. Foreign multinational corporations make up the majority of those in control of this industry. Major contracts in some of these sectors are handled by this type of contractor.

2. Subcontractors

Some of the key contracts that the main contractors have received are handled by these local independent contractors. 

Despite being mostly unconnected, these groups are quite good at what they do. They would take on a project given to a bigger corporation since they are often tiny businesses seeking expansion opportunities.

Since the contract is re-awarded, their earnings are lower than those of the direct contractors; yet, they consistently produce on schedule in order to get other contracts from the contractor’s company.

How to get a government contract

Here are steps to get a government contract in Nigeria:

1. Register your business

Only registered businesses are eligible to bid on government contracts so you must register your business first if you want to land a government contract. Individual bidding that is not registered is not permitted. 

2. Create a portfolio

It’s crucial to have completed something comparable to a government or commercial contract before applying for one. Proof of prior performance is often required by government organizations, and you must have taken all necessary steps to ensure that you have met these requirements.

When it comes to accumulating experiences, nothing is insignificant. Doing labor for free or at a reduced cost is one technique to accumulate evidence of prior performances. Building a reputation that you can always use as a guide when you decide to take on bigger and more challenging tasks is more important than making a lot of money.

3. Establish connections

In the professional world, you won’t go very far if you do not know the right people. You might have all the credentials but an opportunity might go to someone with more connections. This shouldn’t make you lose courage or give up.

Instead, you should start making connections as early as you can. Have a good relationship with your professors in school, make meaningful friendships, attend trade shows, and join online groups where you can meet reputable people in the field.

If you’re lucky, you could meet someone who could completely change your life and connect you to a worthwhile contract.

4. Obtain the necessary certifications 

A contractor must submit an expression of interest (EOI) form and include all or part of the following details to bid on a government contract: 

Legal Requirement

(a) The company’s evidence of incorporation with the Corporate Affairs Commission, together with its most recent annual returns, and articles of association, forms C02 and C07.

(b) The business must provide proof of meeting its tax obligations in the manner described below:

• The VAT Registration Certificate, the TIN Number (Tax Identification Number), and the Current Tax Clearance Certificate (TCC) for the three (3) years ending in 2014.
• The bidding company’s audited financial statements for the last three years, as certified by a professional accounting firm.
• A letter of recommendation from a respectable bank and proof of financial capacity (Statement of Account).

(c) Proof of being added to the PENCOM registry.

(d) A certificate of conformity attesting to the completion of the mandatory payment to the Industrial Training Fund.

(e) An affidavit in accordance with the Procurement Act 2007 Section 6.

(f) A letter giving the Authority or her representative(s) permission to do Due Diligence on any papers the business submits, regardless of where they come from, to verify whether or not they are authentic.

(g) Proof of inclusion in the relevant government’s Federal Contractors Public Procurement database.

Technical specifications

(a) Proof of experience working as the principal contractor on at least four (4) projects of comparable complexity to the one being proposed, at least one of which must have been completed in the past three years. Enclosed must be scanned copies of the award letters, the interim certificate of valuation for the ongoing project, the completion certificate, and, if relevant, the final maintenance certificate.

(b) Proof that at least four (4) relevant experts are on staff, together with information on their positions, titles, and backgrounds.

(b) Proof that the necessary tools and machinery are in possession.

(d) A history, supported by evidence, of the company’s CSR policy.

(e) The project’s implementation methodology.

Additionally, scanned copies of the company’s technical and professional staff members’ credentials that are to be presented must have professional seals embossed on them, be initialed, and be approved by the owner. 

5. Find Opportunities

The next step is looking for available contracts that you can bid for. This is where having a rich connection will benefit you the most. Talk to the people you know about available contracts that you can bid for, and if they can recommend you to anyone.

If you can’t find information from your contacts, then you can go online. Government contracts are usually publicly advertised on websites like The Federal Tenders Journal (FTJ), Federal Ministry Websites, National Public Procurement Portal, State Government Procurement Portals, various Newspapers, and online news channels.

6. Contact the procurement division

For each of the businesses you qualify as a possible contractor, get in touch with the procurement manager. Inquire as to whether they need to contract for your company’s services now or in the future.

When they require services, inquire as to whether they have a list of possible contractors to whom they would send a request for a contract bid. Ask them to put your business on the list.

7. Thoroughly review the bid proposal

Request a package of materials outlining the company’s bid requirements and procurement procedure. Be aware that these proposals will be thorough, and that your prospects of winning a bid might be ruined if you don’t comprehend what the plan calls for. Examine each line of the request to determine what has to be done, when, and to what extent your business may be subject to limitations. 

After this, fill out the supplier capabilities forms that are included in the package they provide, then submit them. Provide any supporting paperwork that may be required to validate your company’s background, capabilities, financial stability, and the goods or services you provide.

8. Prepare your proposal

The next and most important step is to create a proposal. Make sure the value your company will provide is emphasized in your proposal. Make sure your proposal stands out from the numerous others that are submitted by showcasing all previous work related to the contract that you have successfully delivered.

To do this, you may need to draft a top-notch proposal that is more visually appealing and outstanding. You can also ask the procurement department for guidance on what should be included and excluded from the proposal.

Give a brief overview of your business, your credentials, and why you should be awarded the contract at the start of your bid submission. Explain how you plan to finish the task for which you have been hired. Send in any documentation that the request for bid proposal asks for, making sure that all documents are filled out, accurate, and signed.

Provide a list of the qualifications of the main employees and any subcontractors. In the order that the criteria are sought, describe how you will satisfy the requirements of the RFP. If necessary, provide further paperwork, such as certificates or evidence of insurance.

9. Determine your bid

Include your profit margin and overhead expenses in your bid calculation, such as labor, materials, and equipment use. Expect your competitors’ expected bid, but don’t attempt to underbid such that the contract becomes unprofitable for your company.

Winning a contract does not necessarily depend on having the lowest offer. Instead, make an effort to submit the most alluring offer. This entails offering the greatest turnaround and quality at the most affordable cost.

10. Defend your bid

You can be asked to submit a proposal for the contract if you fulfill the minimal criteria. You would next have to present and defend a few of your earlier ideas in front of a panel of judges, who would probably include the parastatal’s directors.

Here, you would give it your best and, if at all possible, provide the same job that you completed successfully for a previous customer.

In addition to providing verifiable evidence of prior performance, you would also need to provide competitive pricing and demonstrate that you could complete the job quickly.

You would have a good probability of getting the contract if your prior performance, the project’s completion schedule, and its cost align with what management desires.

11. Sign the contract 

If you have made it to this step, then congratulations as you have successfully won the bid. Then you will have to sign the contract with the appropriate government officials. Make sure you review the contract carefully before signing anything and it is good practice to have a lawyer with you when you sign it.

12. Perform the work

Winning the bid and signing the contract is just the first step. You still have a long and difficult journey ahead. You now have to do the hard part—assemble a fantastic team to execute the contract flawlessly.

Ensure that you go above and beyond especially if it’s your first government contract. In addition to making your portfolio seem more reliable and trustworthy, this will lead to repeat contracts with the government.

Conclusion 

Government contracts may be hard to get, but it has the power to drastically change the financial circumstances of you and your company. Not only do you need to be excellent to succeed, you need to know the right people and have luck on your side.