FG releases new contracts thresholds, variation guidelines 

….Works variations of N10 billion and above to go through FEC/NJC/NASS Tenders Board

The federal government on Sunday,  released  comprehensive guidelines on the implementation of the revised policy of the  variations of contract sums and mandatory use of final designs.

The new guideline is in pursuant to Sections 5(a) and (o) of the Public Procurement Act, 2007, under the supervision of the Bureau of Public Procurement BPP.

BusinessDay gathered that the new policy, followed  approvals granted by the Federal Executive Council (FEC) and conveyed vide SGF Circular Ref. No. 59780/S.2/B/568 dated December 2025, which  centralises the review and certification of all requests for revision of contract sums and modification of contract scope under the BPP.

Under the new guidelines, the federal government stated that augmentation/variation sum, not the total revised cost, will now determine the approving authority.

For Works, variations of N10 billion and above will have to go to either the Federal Executive Council, FEC, or the National Judicial Commission NJC, or the National Assembly Service NASS, Tenders Board, as may be necessary.

“Works variations of N5 billion to below N10 billion go to Ministerial Tenders Board/NASS.

“Works variations of N75 million to below N5 billion go to Parastatal/Judicial Tenders Board.

“Similar thresholds apply for goods and services. Variations below N75 million for works and N50 million for goods/services are approved at the Accounting Officer level.”

The  latest guidelines supersede that of 2013, conveyed vide a circular which required Presidential approval for RETC/variations above 15% of the initial contract sum or N1 billion.

“Under the revised framework, the applicable Service-Wide Prior Review and Monetary Thresholds will now determine the appropriate Approving Authority for variations and scope modifications.

Following the centralisation of review and certification under the BPP, all  Ministries, Departments, and Agencies (MDAs) are expected to submit requests for variation orders, fluctuation claims, and scope modifications directly to the BPP for review and certification.

Under the guideline, no  variation or fluctuation claim shall proceed to the relevant Approving Authority without a BPP Certificate of No Objection.
The guidelines aim to establish transparent, legally-compliant procedures for processing variations; align the approval framework with the revised procurement thresholds approved in May 2025; protect public interest by ensuring that variations are genuine and justified; and promote accountability, value for money, and timely project delivery.

“Variations will only be approved where they are genuinely necessary, could not have been foreseen with reasonable diligence, and do not fundamentally alter the original scope of the contract. Unit rates for varied works must be consistent with the original contract rates” .

The guideline also established Permissible and non- permissible for variation.

“Permissible grounds include unforeseen site conditions, material errors in design and BOQ/BEME, statutory or regulatory changes after contract execution, significant price escalation due to macroeconomic shocks or force majeure, and value engineering improvements that reduce cost without altering scope.

“Variations arising from inadequate planning, avoidable design flaws, or addition of new components not contemplated in the original scope will not be accepted. Such additions must be procured as separate contracts.

The federal government, under the guideline, distinguished between variation and fluctuation, explaining that fluctuation claims include changes in the cost of labour, materials, and exchange rates and must be handled strictly in accordance with the Conditions of Contract.

“Contractors who deliberately delay projects to generate fluctuation claims will be denied such claims and may be debarred if claims are found to be bogus or overstated.

The  guidelines also reduce avoidable variations, as all procurements must be based on approved final designs.

The guideline stipulates that the use of preliminary or flawed designs that lead to unnecessary variations will attract regulatory sanctions.

” Requests to the BPP must include a forwarding letter signed by the Accounting Officer, the original contract agreement and BOQ/BEME, revised BOQ/BEME and final designs, backup calculation sheets, status and progress reports, progress photographs, technical assessment of contractor capacity, interim valuation certificates, and supporting invoices and delivery notes for fluctuation claims.

The guideline also recognises the BPP Certificate of No Objection as  constituting regulatory clearance to proceed to the Approving Authority,  but does not constitute approval for payment.

“Certificates are valid for six months. Variations, fluctuation claims, and scope additions processed without BPP certification will attract sanctions under the PPA 2007, including suspension of officers and debarment of contractors.

“Within 30 days of Tenders Board approval, MDAs must publish on their websites and the BPP portal the contractor’s name, original contract sum, augmentation sum, revised contract sum, and grounds for the increase.

The guidelines also mandate the BPP to  periodically submit Council Notes to FEC on reviewed and approved variations, as it also  reinforce the Federal Government’s commitment to fiscal discipline, transparency, and value for money under the Renewed Hope Agenda.

“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. The BPP will apply these rules rigorously and fairly across all MDAs,”

The policy takes effect immediately and applies to all ongoing projects irrespective of when the original contract was awarded. MDAs are required to bring the guidelines to the attention of Accounting Officers, Tenders Boards, and Procurement Officers for strict compliance.