What You Need To Successfully Bid For Federal Government Contracts In Nigeria

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Federal government contracts in Nigeria are a very important means of giving life to government manifestos and implementing structural and other forms of development in the Federation. It is also a boost to the economy of the country. These contracts have a huge impact on the economy as they provide jobs to many. The federal government has realized this importance and has therefore started awarding these contracts to companies that can meet the laid down criteria.

Bidding for Federal government contracts in Nigeria can be tough and stressful for many contractors. It is usually a strict bidding system, which might seem difficult but it is worth the while. Companies submit their proposals to the government which pass through full screening. A lot of conditions are factored into the selection process. These are the criteria that you must have to be able to bid for these contracts successfully.

1. CAC Registration Certificate

Firstly, you need to get your company registered, evidenced by a certificate from the CAC. What is CAC certificate? The CAC certificate is an important document for any business entity to have as it proves the existence of a corporate legal entity in Nigeria. The certificate ensures corporations comply with various laws and regulations. It is a prerequisite for every company to register their business with the Corporate Affairs Commission (CAC) in order to successfully bid for federal government contacts. No unregistered company bidding is allowed. This Evidence of Incorporation of the Company with the Corporate Affairs Commission is to be accompanied by the Memorandum and Article of Association of the Company, Status report as well as evidence of updated Annual Returns.

2. Tax Obligations

The company must demonstrate compliance with its tax obligations by providing evidence such as a Current Tax Clearance Certificate (TCC) for the last three (3) years, along with the VAT Registration Certificate and Tax Identification Number (TIN). A Tax Clearance Certificate is a document issued by the FIRS or relevant State Internal Revenue Service in Nigeria to certify that a person has fully paid their taxes. Newly registered companies can also obtain a TCC, which serves as proof that they are cleared from their tax obligations. Obtaining and maintaining a TCC can help safeguard your business from potential tax issues, ensuring compliance with tax regulations.

3. PENCOM Compliance Certificate

National Pension Commission (PenCom) compliance certificate is compulsory for employers of labour with 3 or more employees who wish to bid or solicit for any Federal government contract or business from any Federal Government Ministries and Agencies. All organizations must provide proof of compliance with the provisions of the Pension Reform Act, 2014 (PRA 2014) by obtaining the compliance certificate. This compliance certificate is issued by the National Pension Commission (PENCOM) yearly. Organizations wishing to obtain the annual Pension Clearance Certificate are required to forward their applications to the Commission along with the following documents:

Company’s registration documents
Certified list of employees
Certified rate of monthly pension contributions (10% for employer, 8% for employee)
Evidence of remittance of monthly pension contributions for all employees
Evidence of remittance of all outstanding pension contributions for the last 3 years or from the date of incorporation
Evidence of transfer of pension fund and assets (if applicable)
Evidence of current group life insurance policy for staff
Payment of fees

The processing of applications takes about 3 weeks from the date of receipt. Certificates or rejections can be picked up at the offices where the applications were submitted.

To successfully conduct business in Nigeria, it is imperative to adhere to the relevant regulations, which include obtaining the necessary licenses and permits and registering the business. For instance, engineering companies are required to obtain a COREN License, while security companies must secure a Security License from Civil Defense. Additionally, businesses may need a Business Permit from NIPC or an NEPC certificate for export companies.

If you require assistance in obtaining these licenses or permits, our team of expert corporate lawyers is well-equipped to provide you with professional guidance and support. Contact us now to ensure that your business operations in Nigeria are in compliance with the applicable regulations and to facilitate a seamless business setup process.

4. NSITF Compliance Certificate

The National Social Insurance Trust Fund – NSITF Compliance certificate is one of the major and important documents required for contractors or companies dealing with the Federal government of Nigeria. The National Social Insurance Trust Fund (NSITF) is a Social Insurance Scheme designed to provide compensation to employees who suffer from occupational illness diseases, injury, disability or incapacitation from an accident at the workplace or during employment.

This covers the usual place of work or outside the place of work. It is also designed to ensure compensation to the employee’s next of kin in a situation of death in the course of work. To obtain the NSITF certificate, there will be a physical assessment of your employees’ wages by NSITF in order to ascertain the amount that will be paid per month multiplied by 12 months.

The following are the documents required for NSITF Registration:

Certificate of Incorporation with CAC
Completion of the Registration form – stating Company Name, Address, Telephone No etc.
Payroll Schedule Form stating employee’s details- Staff Name, ID Number, Gender, Remuneration
Tax Clearance Certificate

5. ITF Certificate

The Industrial Training Fund ITF Compliance Certificate is a major document required while bidding for contracts in any Federal government ministry or agency. Every employer having either 5 or more employees in its establishment or having less than 5 employees but with a Turnover of N50 million and above per year, shall be required yearly or on the prescribed date, to contribute one per cent of its total annual payroll to the Fund. One must comply with this before a certificate can be issued.

The process for applying for ITF Compliance Certificate includes:

Completing ITF Form 7A and submitting it to the nearest ITF Area Office along with the following:
- 1. A copy of the company’s Corporate Affairs Commission’s Certificate of Incorporation.
  2. Certified true copies of the company’s Audited Account.
  3. A copy of the company’s Tax Clearance.

The company will be assessed for its liability by ITF Revenue, Inspectorate and Compliance Officers.
Payment of fees.
After payment, a hard copy of the receipt and acknowledgement letter will be issued to the client.
The ITF Area Office will then forward the employer details as contained in form 7A to Headquarters’ Revenue, Inspectorate and Compliance Department for issuance of the ITF National Number.
The ITF National Number will then be sent to the Area Office for Scripting and issuance of a Certificate of Compliance.

6. Interim Registration Report(IRR) or BPP Certificate

This is issued by the Bureau of Public Procurement (BPP) to all Contractors, Consultants and Service Providers (CCSPs) already doing or intending to do business with the Federal Government of Nigeria (FGN). Companies doing or aiming to get a contract from the federal government are encouraged to register in the BPP database as it is currently the only data management system for Contractors and Service providers in the country. IRR is a very important document for Contract bidding in Nigeria. The returns are to be made yearly to the BPP. Foreign CCSPs are also allowed to register in this database.

To be registered in the database a CCSP must fulfil all the requirements of a legally registered Corporate Entity, fulfil all obligations to pay taxes, pensions and social security contributions and in addition have the human, technical and financial capacity to execute contractual obligations with Federal Government of Nigeria, then on successful completion, an IRR is generated

7. Company Profile

Lastly, building a portfolio is a way you can show proof of your past performance or capacity to perform; and this is very essential before applying for a contract. A company profile is a document that gives an overview of the company. It contains information about the company’s history, its products and services, and its management. A company profile can be used as an introduction to your business or as a sales tool for potential clients or investors. The main objective of writing a company profile is to attract new customers, increase brand awareness, and create interest in your products or services.

The following are some of the things you need to include in your business profile: a company’s history or description, corporate statement, products and/or services, resources, organization structure, performance status and product portfolio

Conclusion

The above requirements may look cumbersome but an expert experienced in these matters can make these processes easy for interested companies. Ensure that you contact an expert to advise and put together all these documents for you so as to avoid any complications or mistakes.

Writer: Olamide Oni
Contributor: Jibstar Business