The Federal Government has vowed to sanction heads of government agencies and publicly funded institutions involved in inflated contracts and violations of procurement regulations.

The government warned that accounting officers who continue to award contracts outside established procurement rules would face penalties.

The Secretary to the Government of the Federation, George Akume, issued the warning in a circular directing government-owned enterprises, corporations, councils, authorities and commissions to comply strictly with the Public Procurement Act, 2007.

The circular, obtained by The PUNCH, was addressed to ministers, permanent secretaries, heads of government agencies and other senior public officials.

Government raises concerns over contract inflation

Akume expressed concern that several government-owned enterprises and corporations continued to award contracts in violation of procurement regulations despite amendments introduced through the Finance Act, 2020.

According to the SGF, the breaches had resulted in inflated contract prices, restricted competition, exclusive arrangements for contractors and inadequate regulatory oversight.

He said the government would no longer tolerate such practices, stressing that institutions using public funds must ensure their procurement activities comply with the law.

The circular directed accounting officers to liaise with the Bureau of Public Procurement (BPP) for guidance on implementing the regulations.

It warned that officers who continued to award contracts without complying with the Public Procurement Act would be sanctioned.

Akume also instructed that the circular be circulated among all accounting officers for immediate implementation.

Procurement law and accountability

The Public Procurement Act, 2007, established the BPP as the regulatory authority responsible for monitoring public procurement, setting standards and promoting transparency and competition.

Section 15 of the Act, as amended by the Finance Act, 2020, extends its application to federal government-owned enterprises, corporations, councils, authorities and commissions that utilise public funds.

Section 20 also places responsibility for procurement compliance on accounting officers, including permanent secretaries and heads of government agencies.

The latest directive reinforces their responsibility to supervise procurement processes and ensure compliance with the law.

FG introduces tougher procurement controls

The warning comes amid several government measures aimed at curbing contract inflation and strengthening accountability in public spending.

In October 2025, the Federal Executive Council directed the strict application of the Public Procurement Act across federal institutions, following its meeting on August 13, 2025.

The directive covered government-owned companies and enterprises, the National Assembly, the Judiciary, defence and security agencies, and the Central Bank of Nigeria.

In October 2026, the Federal Government also introduced a mandatory 14-calendar-day standstill period between the announcement of an intended contract award and the conclusion of procurement contracts.

The measure allows unsuccessful bidders to seek clarification, request debriefing or lodge complaints before contracts are finalised.

Under the National Guideline on Debarment of Contractors, consultants and service providers found culpable of fraud, corruption, document falsification or persistent failure to execute public contracts may be barred from federal procurement for between three and five years.

BPP tightens contract variation rules

In May 2026, The PUNCH reported that the BPP barred ministries, departments and agencies from processing upward revisions of contract sums without the bureau’s certification.

The revised guidelines require all requests for variation orders, fluctuation claims and project scope modifications to undergo BPP review and certification before approval, regardless of the amount involved.

The framework replaced the 2013 guidelines, which required presidential approval only for contract variations exceeding 15 per cent of the original contract sum or N1bn.

BPP Director-General, Dr Adebowale Adedokun, said the reforms were designed to prevent contract variations from being used to inflate project costs.

“Variations must not become a backdoor for cost inflation and scope creep,” he said.

The bureau warned that unauthorised contract variations could attract sanctions, including the suspension of responsible officers and possible debarment of contractors.

BPP reports savings from procurement reforms

In August 2026, Adedokun disclosed that the Federal Government had saved about N1.4tn in 18 months through the bureau’s price intelligence and benchmarking initiatives.

He said the reforms enabled the BPP to scrutinise project estimates submitted by government institutions and compare them against established pricing standards before granting procurement approvals.

The bureau also reported that its procurement reviews saved the government more than N303bn, $304.9m and €1.74m from inflated contract costs between January and September 2025.

The figures were based on the bureau’s assessment of contracts reviewed.

The latest directive underscores the Federal Government’s efforts to strengthen procurement compliance, prevent inflated contract costs and ensure that public funds are spent transparently and in accordance with approved regulations.