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Winning a contract in Nigeria is no easy feat. Whether you’re trying to secure one from a private company or the government, the process leading up to a successful bid is often laborious and drawn out. It’s all set up so that only patient and meticulous bidders have a chance of landing a contract in the end.

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But this shouldn’t discourage would-be contractors from pitching to potential clients. Contracts can be quite lucrative; they may also offer the parties involved a chance to build the country’s public and corporate infrastructure– both causes worthy of commendation. Businesses that get involved could reap benefits that make the associated challenges worth scaling.

If you would like to become a contractor in Nigeria, you’ll find this article useful. Here we’ll explain the various steps you can take to win contracts and become a relevant player in the contracting space.

But first, let’s have a look at the types of contractors who are hired to work on projects in the country.

Types Of Contractors

There are basically two types of contractors: major contractors and subcontractors.

Major Contractors are typically big companies that take on large scale projects, such as the construction of roads, bridges, stadiums, power plants, dams, and other civil engineering projects of a considerable scale. These tasks are assigned to bigger companies because they supposedly have the capacity to execute them. Their clients are government Ministries, Departments and Agencies (MDAs) and other large companies.

Subcontractors are companies that are assigned portions of major projects by major contractors. They tend to be smaller sized businesses that specialize in a particular kind of operation. For example, if a major contractor secures a contract from the government to build roads, they may subcontract the supply of granite for the project to a smaller enterprise.

If you’re just starting out in the contracting business, it’s advisable that you begin as a small scale subcontractor (unless you have the resources needed to launch a big contracting company). Build your connections and influence over time, until you have achieved the size and scope required to begin bidding for major contracts.

What You Will Need To Bid For A Contract

Nigerian government MDAs expect companies responding to their tenders to possess certain documentation that proves that they are legally, financially, and technically capable of executing projects. Such documentation includes evidence of incorporation with the Corporate Affairs Commission (CAC), evidence of the fulfilment of tax obligations, statement of account or turnover, and evidence of having worked on similar projects in the recent past, among others.

The Federal Government also requires that potential bidders for its projects be included in its database of federal contractors.

Companies seeking contractors for their projects may ask for proof that the latter has the legal and technical capacity to execute those projects. However, the specific requirements they demand could differ, depending on what they consider appropriate for the task in question.

Steps To Winning A Contract In Nigeria

The following are steps you can take to secure a contract in Nigeria.

Build Your Portfolio

As we’ve already noted, it’s preferable that you begin as a subcontractor working on smaller projects. This will provide you with the experience and connections you need to make the step up to major contracting later on.

Regardless of how you start out, you’ll have to register your business with the relevant authorities. Set up the company in a district or region within which your potential clients exist.

It’s important that you begin on a strong note. Consistently deliver quality results well within deadlines, and impress your contract partners with your diligence. All of this will gain you a positive reputation, which you can leverage to pick up more projects in the future.

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Research Potential Client Companies

Before you begin preparing bids, ensure that you choose an industry you’ll target with your services. Your decision here should depend on the technical capabilities you have at your disposal.

After narrowing your search to a specific industry, your next step should be to research and note companies within that industry from which you would like to get a contract. You may do this using the web, and by following industry news and trends.

 

Establish Relationships With Potential Clients

A lot turns on the relationship you have with the companies you intend to do business with. While you might consider your team competent enough to land contracts, their technical expertise may not be enough to turn a potential client’s decision in your favour. They will often go with contractors who have a long-standing relationship with them.

As you make yourself familiar with your potential clients, make sure to ask them for information about their bid requirements. Speak with the people in charge of procurement at those firms, to learn whether or when they will put out a request for bids.

They may have a list of possible contractors that they have created over time; ask to be included in such a list if it exists. Doing this will increase your chances of getting contacted early when the companies concerned put out a request for bids.

Receive And Study Request For Bid Proposal

When the government or a company sends out a Request for Bid Proposal, get a copy and study it closely. Go through every line, and make sure to understand what the requirements are.

As you study the Request for Bid Proposal, think about your chances of winning the contract given the project description, rules, terms, and conditions contained in the request. Some things you should consider include your knowledge of the company or MDA, and the extent to which the contract fits with your business’s mission and capabilities.

Another thing you should weigh is the potential profitability of the project. If it’s widely sought after by other bidders, the competition for it could be stiff, and several bidders may try to undercut rivals by offering low costs. This might make it difficult to you to present a bid that’ll fetch you a profit. There’s more on the financial end of the bidding process below.

Begin The Bid Process

Do what you can to make your bid attractive to the party you’re sending it to. It should note your qualifications and competencies, your proposed timeline for the job, and how you plan to execute the project. Include supporting documents where they are required.

Calculate the possible cost of the project by evaluating and integrating the cost of each component or resource needed to complete it: machinery, labour, materials, etc.

You may be tempted to make the final price as low as possible, in order to increase your chances of securing the contract. However, a better strategy would be to rely on a combination of a positive reputation, relevant portfolio, and fair pricing (with a reasonable profit margin).

Win The Contract

There’s a lot that goes into determining a winning bid. Your technical capability and track record are important. The degree of goodwill and influence you can command (based on the relationships you’ve built) are crucial factors as well.

You won’t have total control over the bid evaluation process. But you can increase the likelihood that you’ll succeed by taking the steps we’ve discussed here

Featured Image Source: Kahane Law Office
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This article was first published on 2nd March 2022

ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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