Winning contracts in Nigeria from the government and large organizations can be tough for many contractors. There is usually a strict bidding system; hundreds of businesses submit their proposals, many get screened out, and those who remain compete with a lot of other very qualified businesses for the prize.
While many businesses strive to get contracts in Nigeria from the government or large corporations, it’s a lot more difficult than it seems. A lot of conditions are factored into the selection process, the depth of your personal connections matter too, and above all else, you may still not turn out successful in the end.
So how do people get government contracts in Nigeria? And how should you go about it?
If you’re looking for how to get contracts in Nigeria from the government and private organizations, read on:
See Also: The 7 Biggest Mistakes Contractors Make
Types Of Government & Private Contractors
1). Direct Contractors:
The direct contractors are people who bid for the contracts directly and turn out successful. These organizations are usually well connected and do not mostly have the technical know-how to execute the contracts, but rather, have a wide network of smaller companies and freelancers who have the skill to execute.
When direct contractors bid for contracts, they usually quote a very high amount so as to cover the fee of the sub-contractor and also make a substantial profit at the same time.
If you’re well connected or have a track record of successful projects you’ve done in the private sector, applying for a private or government contract in Nigeria can work in your favour.
These organizations are mostly not connected, but are highly skilled in what they do. They are usually small companies looking for growth opportunities and would take on a project awarded to a larger company.
They earn smaller amounts than the direct contractors since it’s a re-awarded contract, but always deliver on time to ensure they can get more projects from the contractor’s firm.
Common Legal Requirements For Bidding In A Government Contract
When a contractor wants to bid for a government contract in Nigeria, they submit their expression of interests (EOI) form and provide all or some of the following information:
- Evidence of Incorporation with Corporate Affairs Commission
- Evidence of Registration with the respective ministry
- Evidence of registration with the National Bureau of Public Procurement
- Three years Tax clearance (TIN) from the Federal Inland Revenue Services (FIRS) or the State Internal Revenue Services.
- Financial capability (Bank reference)
- Evidence of competent personnel/organization structure
- Evidence of similar job(s) done with letter of completion or execution as a proof
- Evidence of partnership in case of a Consortium.
- Certificate of Compliance with Industrial Training Fund (ITF)
- Certificate of Compliance with National Pension Commission (PENCOM)
How To Get Contracts In Nigeria From The Government And Private Institutions
1). Build A Portfolio:
Before you apply for a government or private contract, it’s important that you have executed something similar, to a great extent. Government and private organisations usually require to see a proof of past performance, and this must have been covered on your own end in every possible way.
Some ways to build up proof of past performances is to do some work for free or for low prices. The goal here isn’t to make a lot of money, but to build a track record you can always refer to when you choose to pursue greater and more demanding opportunities.
2). Look For Opportunites:
The next step to getting contracts from the government and private institutions is to seek information. You do this by first researching the institutions that are prone to sending out Requests For Proposals (RFPs) a lot, what contract categories their proposals always cover, and much more information.
Two ways to do this are to:
a). Contact The Procurement Department:
You could hire marketers that’d be paid well based on their performance metrics, and have them visit the procurement departments of a lot of government and private organizations around the country. When they visit, they’d ask for information on pending or future contracts, and go on to build relationships with the staffs in the respective procurement departments.
Anytime there’s an opening for any category you mentioned your organization can deliver efficiently on, they’d tend to reachout to you, amongst others they’d also contact.
b). Use The Internet:
The fastest way to find out which government organizations have RFPs is to use the internet. Most procurement departments always publish Request For Proposals (RFPs) on popular contract sites like www.etenders.com.ng.
When you visit these sites, you’d have a wide plethora of real-time RFP information and can be able to apply for tens or hundreds quickly, because the information are at your finger tips.
3). Determine If You Will Submit A Bid:
When you see or get a Request For Proposal (RFP), it’s important that you study the various conditions carefully. Every organization always has basic requirements, and not meeting them could get you disqualified before you even get the chance to prove you’ve done numerous similar projects.
If it’s a government contract, the conditions mentioned earlier in the article are most likely to be enforced. If you have a registered business name and not company with less than a certain number of staff members, you can still apply because you’d be exempted from some of them, like having the PENCOM certificate.
4). Prepare Your Proposal:
Make sure your proposal highlights the value your business will add to their organization. Show previously awarded and completed works that you successfully delivered, and ensure your proposal stands out from many other proposals that are submitted.
To achieve this, you may need to prepare a world-class proposal that has a more visual appeal and strays completely far off the norm, like the one Startup Tips Daily Media prepares, and you can also seek advice from the procurement department on what is best to be included and kept off the proposal.
5). Defend Your Bid:
If you meet the minimum requirements, you may be invited to bid for the contract. At this point, you’d meet with a panel of judges, most likely the directors of the parastatal, and would have to show and defend some of your previously completed projects.
Here you’d put in your all, and if possible, present exactly the same project that you successfully executed for another client.
Asides just a verifiable proof of past performance, you’d further need to offer a competitive price and show you’d deliver the project in a short timeframe.
When your past performance, the timeframe for the completion of the project, and project cost are in sync with what the management wants, you’d have a high chance of winning the contract.
6). Execute The Contract Or Maybe Not:
If you turn out successful in the contract bid, you’d need to put an amazing team together to achieve a near perfect execution. This will cause the organization to refer you to other organizations, plus would also make your portfolio have a more credible and trustworthy image.
Challenges Of Getting Contracts From The Government
1). Financial Constraints:
Every organization bidding for a government contract is expected to show a full financial capability to execute the project. The problem now is most businesses can’t show that, but have the means to deliver on the project.
2). Internal Politics:
In almost every contract bid, at least one decision-maker already has a preferred candidate. This causes most bidding processes to be futile for even very qualified prospective contractors.
While many organizations still win government contracts without having an internal source, much more people with connections turn out successful.
3). Delayed Payments:
Executing government contracts is very different from executing contracts from private organizations. The government mostly never pays on time, and can sometimes delay payments for months or even years.
Small businesses do not have the luxury of time to wait for delayed payments because it could mean the end of their business; causing government contracts to mostly be for financially strong organizations.
To Sum It Up
Getting contracts from the government or private organisations can not just be difficult to get, but can also change a person’s financial situation over night. To be successful, you need to cover a lot of parameters and ensure you have a track record to refer to, the required paper work, a keen eye for opportunities, an outstanding presentation, and a bit of luck to eventually turn out successful.
If you’ve ever wondered how to get contracts in Nigeria from the government and private organisations, this article is a great start.