Being a Contractor means obtaining contracts from the federal governments and other big companies such as multinationals. Although this is not an easy task, you can pull it off if you follow due process. The Federal government is responsible for providing security and good governance by physically distributing government projects. Hence, the government involves the services of those in private sectors as main contractors and subcontractors in project management, execution, service delivery, and consultancy. Getting a contract in Nigeria is not a joke as it can make you a millionaire overnight. This article covers all you need to know about becoming a contractor including insider tips.
Read on below:
Education and Specialized training
The first step to becoming a contractor is to get a degree from a higher institution. This can be a BSc., OND, or its equivalent from an accredited school within or outside Nigeria. Asides from formal education, you need to get specialized training in your specific area of interest such as project management, procurement, and consultancy. Other certifications you should consider having before becoming a contractor in Nigeria include:
- The National Social Insurance Trust Fund (NSITF) Compliance Certificate
- The Industrial Training Fund ITF Compliance Certificate
- National Pension Commission (PenCom) compliance certificate
- Bureau of Public Procurement BPP Federal Contractor Certificate
Specialized training or certificate in your field of interest will give you an edge over other contractors when bidding for contracts.
Register your business
The next step you need to get done is to register your company because all tenders to Government contracts must be through a registered company. According to the constitution, no unregistered business is allowed to bid for a contract. After registration, you can either become the main contractor or a subordinate contractor.
Identify your Niche
There are different types of contracts, as well as contractors with the government and big companies. These are:
Major contractors: These are mainly big Nigerian companies and multinational companies.
These are the local independent contractors who handle some parts of the major contracts won by the major contractors. Subcontractors sometimes get sub-contracts from the major contractors who work directly for the government. Some of these projects include the supply of equipment to the major contractors.
Below are areas where a contractor can function:
Civil and Building Engineering: This has to do with major constructions such as roads, major bridges, stadium constructions, oil refineries, and many others
Technical Consultancy: These contractors provide consultancy services in various areas such as Structural integrity, human factors, quality of materials, inspections, laboratory analysis, etc.
Supplies and Finance: This has to do with the management of project finances.
In order to become a Contractor, you need to be sure what niche your specialty falls under so you can get contracts even better and be efficient at your work. The specialized training you choose to acquire depends largely on your area of interest such as project management, procurement, and consultancy.
Start building your portfolio
You do not need to have handled a big contract before you document your experience as a contractor. You can start with any project you have handled before. As you keep progressing and gaining experience and connections, your portfolio will keep expanding. Your portfolio is crucial as it is used to determine who is given a contract and who is not.
Register with the Bureau of Public Procurement
The standard requirement for contract bidding in Nigeria is made available by the regulatory body for federal contractors which is the Bureau of Public Procurement. All federal contractors are required to register with the Bureau of Public Procurement which contains a national database and provides an opportunity for the government to streamline all activities of contractors. This means that every contract of the federal government is first run by contractors in the Bureau of Public Procurement database. Registration with the Bureau of Public Procurement is important as it bears witness to a contractor’s ability to do a job well.
Bureau of Public Procurement requires the following documents when registering on their website:
- Classification of business information.
- Business Categorization Information.
- An ITF (Industrial Training Fund) certification which must show a detailed history of contributions to the fund.
- A company’s key personnel information.
- Company tax compliance information: This reveals the level of compliance to tax payment.
- The company registration details.
- Businesses classified under “goods,” are required to include manufacturer representative information is required
- Companies categorized under ‘services sector; are required to submit a professional body of regulatory information.
- Information on employee pension compliance.
Classification of Contractors
After the verification process with the Bureau of Public Procurement, the company undergoes a process where it is classified according to its financial capacity. Factors put into consideration include state of equipment, types of available equipment, personnel available, etc. It is at this point that a contractor is given a permanent ID card. Additional information required for a contract include:
- A reference from a bank of reputable standing
- A record of annual audited accounts
- A Value-Added-Tax (VAT) registration certificate.
When bidding for contracts, there are technical requirements the determine eligibility. These are:
- Evidence of work experience as the main contractor who has executed a minimum of four (4) projects that are similar to the proposed work. One of these must-have gone beyond the last three years.
- Scanned copies of award letters
- Interim Certificate of Valuation for ongoing project
- Completion Certificate and Final Maintenance Certificates (where applicable)
- Evidence of staff with at least four relevant professionals, stating their roles, designation, and experience.
- Certificates of the technical and professional staff of the company which must be endorsed by the company head
- Evidence of possession of relevant machinery and equipment.
- Evidence of company’s policy on Community Social Responsibility
- Methodology of implementation for the project.
This article covers the process involved in becoming a contractor and also bidding for contracts in Nigeria. The process can take some time and will require your patience as well as diligence.