TRANSACTIONS of the Clark Development Corporation (CDC) last year totaling P17.972 million violated the implementing rules and regulations of RA 9184 or the Government Procurement Reform Law, government auditors said.
The 2018 audit report on the CDC noted splitting of contracts in the procurement of goods, services and infrastructure projects even if the items or services being procured were similar in nature.
Splitting of government contracts is defined as the division or breaking up of contracts into smaller quantities and amounts or dividing contract implementation into artificial phases or sub-contracts for the purpose of evading or circumventing the requirement of the law, particularly the necessity of competitive bidding.
“Our audit and review of procurement activities of the Corporation for CY 2018 disclosed goods, services and infrastructure projects which were split into small amounts so as not to exceed the threshold set for small value procurement,” the audit team said.
For government-owned or controlled corporations (GOCCs) including the CDC, that threshold is set at P1 million.
Audit documents showed rental of equipment from MS Cruz Builders was broken into four purchase orders (POs) even if the total amounted to P3.224 million. The rented items included a payloader, dump truck, road grader, vibratory drum roller, water truck with pump, and a trawler tractor. These were used to prepare the base course for the staging grounds of the February 2018 Philippine Hot Air Balloon festival.
Three purchase orders were all dated January 3, 2018 while the fourth was approved on January 26, 2018.
On the other hand, purchase of Christmas lanterns, a Christmas tree, and park decorative lights totaling P1.301 million from Shooters Lantern Enterprises was divided into three purchase orders dated November 8, 26, and 27, 2018.
Various “small value procurements” were likewise approved for the renovation/improvement of staff houses, guesthouses, office buildings and other facilities totaling P13.447 million.