ABUJA, JULY 26, 2018 – The Federal Government is planning to introduce fiduciary or integrity bond at the point of contract between any of its ministry, agency and department (MDA) and a contractor.
Vice President Prof Yemi Osinbajo who spoke at the breakfast roundtable on rethinking business conduct and practices in Abuja yesterday, said when it beomes operational, the bond will be listed as a pre-requisite before a formal contract award is issued.
He warned that “non-compliance will attract a penalty to be agreed by stakeholders, not one imposed by government, and the penalty may be a percentage of the total contract value.”
Fiduciary or integrity bond seeks to establish the prevention of corrupt malpractices by contractors that expose and cause losses to the government.
Prof Osinbajo said combining the fight against corruption, and building a strong economy is not an easy task. “Dealing with this will not only need patience, time and strong will; it also requires strong innovations and processes to compel people to do the right thing which is why the government has initiated the integrity bond concept,” he said.
The fiduciary bond concept “will not only be a good anti-corruption prevention mechanism, it will also align with the idea behind the Executive Order 001 to create a transparent business environment between government agencies and the private sector.”
To be known as the Fiduciary (Integrity) Bond, it will be a time-elapsing financial instrument issued by a bank or insurance company on behalf of a private enterprise in favor of the Federal Government.
He said if adopted by stakeholders, the concept will further help sanitise the nation’s business environment to improve transparency in government procurement process and can become a worthy tool in the fight against corruption and at the same time create a trusted business environment.
The integrity bond will contain specific conditions for which the bond can be called, it will serve as a guarantee against bribery, inducement and/or fraud or any related malpractice which is uncovered during and/or after providing goods or services to any public or private enterprise or body during the validity period of the bond and it will be a percentage amount of the total contract sum charged by the entity providing the goods and/ or services
The bond is a contractual liability between the Federal Government and the private provider of the goods or service. It reduces the likelihood of unknown businesses from obtaining large contracts, thereby increasing transparency of contracting processes; eliminates the occurrence of prolonged court cases, except in cases where the called bond is disputed and can be extended to contractual engagements between private parties on a voluntary basis.
