Three-Month-Old Company Bags N215Million FRSC Contracts Within Four Months Of Registration Amid Procurement Concerns; Lawyer Calls It ‘Financial Sham’

A review of the federal public payments portal, Govspend, by SaharaReporters has revealed that Swanty 16 Kitchen, a newly registered organisation, secured contracts worth N215 million from the Federal Road Safety Commission (FRSC) within just seven months of its incorporation.

According to records from the Corporate Affairs Commission (CAC), Swanty 16 Kitchen Enterprise was registered on March 15, 2023, yet went on to receive multiple contract awards from the FRSC shortly after its establishment.

Less than four months after its registration, on July 12, 2023, it was awarded a contract of N36.74 million for the “Provision of catering services for the feeding of trainees at FRSC training camp Kontagora, Niger State for the Month of June 2023.”

The description indicates that the task was carried out in June, meaning the organisation received payment for work completed only three months after its incorporation with the CAC.

Another sum of N54.362 million was paid to the organisation by the FRSC for the “Feeding of FRSC trainees at Military facilities Kontongora, Niger State for July 2023.” The payment was made on August 8, 2023.

The commission also paid N52.8 million for the “Provision of catering services for trainees and directing staff at Army training centre, Kontagora, Niger State for the month of August 2023.”

On October 5, 2023, the FRSC made another payment of N59.2 million for catering services at the Kontagora camp.

Similarly, on October 12, 2023, the FRSC paid Swanty 16 Kitchen N11.9 million.

It remains unclear how the organisation was able to present the required documents and meet procurement standards as stated in the Bureau of Public Procurement (BPP) Act, given that it was registered in March 2023. Yet, it secured a N36.7 million contract by June, just three months after registration.

Some of the procurement requirements, according to the BPP Act of 2007, state that the winning firm must have: “Fulfilled all its obligations to pay taxes, pensions and social security contributions.”

While details of the owners of the organisation were not readily available on the CAC beneficial ownership registry portal, SaharaReporters also could not find any digital footprint of the organisation.

Speaking on the development, a lawyer Awosusi Kehinde, described such a move where a three-month-old company gets millions of naira in a federal contract and goes on to get a N215 million contract in seven months as a “financial sham”.

“To win a federal contract, you need your tax clearance certificate, which you cannot get as a three-month-old company. A tax clearance certificate usually consists of returns for a financial year, which the company will be unable to fulfil,” he said.

“It is not just the tax clearance, we also have pensions certificate, NSITF, which should form part of what the company would submit, so the issue is how they would get the document to submit for bidding.”

He reiterated that the move may have amounted to a breach of procurement laws.

“It is hard to bypass the provisions of the law in this regard,” he told SaharaReporters.