BPP moves to curb contract cost inflation with new variation guidelines
The Bureau of Public Procurement (BPP) has introduced a new regulatory framework designed to tighten oversight of contract variations and prevent arbitrary increases in public project costs across Ministries, Departments and Agencies (MDAs).
Under the new policy approved by the Federal Executive Council (FEC), all requests for contract sum revisions, fluctuation claims, and scope modifications must now be reviewed and certified by the BPP before they can proceed to the relevant approving authority.
The guidelines, which take immediate effect, also mandate the use of approved final project designs for all federal procurements. This measure aims to reduce avoidable contract variations linked to faulty or incomplete designs.
According to a statement issued at the weekend by the Head of Press and Public Relations of the BPP, Zira Zakka Nagga, the new framework supersedes the 2013 policy that required presidential approval for variations above 15 percent of the original contract sum or exceeding N1 billion.
The statement explained that the revised policy aligns approval procedures with the new Service-Wide Prior Review and Monetary Thresholds approved by the Federal Government in May 2025.
Under the guidelines, no variation order, fluctuation claim, or scope modification will be processed without a BPP Certificate of No Objection.
The bureau said the policy was introduced to strengthen transparency, fiscal discipline, accountability, and value for money in public procurement.
Director-General of the BPP, Dr. Adebowale Adedokun, stated that the measures were necessary to prevent abuse of the procurement system through inflated project costs and unjustified scope adjustments.
“Variations must not become a backdoor for cost inflation and scope creep. These guidelines ensure that every adjustment to a public contract is necessary, justified, and delivers value to Nigerians,” he said.
The BPP stated that contract variations would only be approved where they arise from unforeseen site conditions, material design errors, statutory changes after contract execution, macroeconomic shocks, or value engineering measures that reduce costs without altering project scope.
However, it warned that variations resulting from poor planning, avoidable design flaws, or introduction of entirely new components outside the original contract scope would not be accepted and must be treated as separate procurements.
The bureau also clarified that fluctuation claims tied to labour, material, and exchange rate changes must strictly comply with conditions contained in the original contract agreement.
Contractors found to have deliberately delayed projects to generate fluctuation claims could face denial of such claims and possible debarment.
Under the revised thresholds, works variations of N10 billion and above will require approval from the FEC, National Judicial Council, or National Assembly Tenders Board, while variations between N5 billion and N10 billion will be handled by Ministerial Tenders Boards.
The BPP further directed MDAs to publish details of approved contract variations on their websites and the bureau’s portal within 30 days of approval.
It said the policy applies to all ongoing federal projects, irrespective of when the original contracts were awarded.
