THE Commission on Audit has sought an investigation by the Office of the Ombudsman into the involvement of former Dagupan City officials in the award of seven public works projects in 2012 and 2013 that violated RA 9184 or the Government Procurement Reform Law.
In a five-page decision dated Dec. 18, 2019 but released only yesterday, the COA Commission Proper granted private contractor LXS Builders and Supplies’ claim for compensation on the completed projects worth P10.33 million.
The commission also upheld the observation of the City Legal Officer that the previous city administration committed violations of RA 9184 for failure to conduct public bidding.
“In view of the violations of RA 9184 committed by some officials and employees of the city, this case shall be referred to the Office of the Ombudsman for investigation and filing of appropriate charges, is warranted,” the COA said.
COA Chairman Michael G. Aguinaldo and Commissioners Jose A. Fabia and Roland C. Pondoc noted the projects were awarded during the incumbency of former Mayor Benjamin S. Lim.
Among the projects were the P4.97 million construction of lateral drainage at the Santiago Creek (Lucao District) and its Phase 2 worth P2.98 million.
Also included were the P1.42 million improvement of the Japanese Garden compound and the P1.25 million repair of various daycare centers in different barangays.
In its petition, LXS Builders said it received only a partial payment of P1.96 million on May 7, 2013 while its follow up letter dated June 28, 2013 asking for full payment of the P10.33 million balance was not acted upon.
In its reply sent on January 27, 2015, the City Legal Officer said payment to the contractor could not be made because the documents pertaining to the projects were not turned over by the former Bids and Awards Committee to the new city administration.
LXS Builders argued that its claim is based on valid contracts that created an obligation to pay on the part of the city government regardless of which administration is running the city. It likewise demanded payment of interest on the unpaid balance, exemplary damages of P100,000, as well as attorney’s fees equivalent to 10 percent of the claim.
The city countered that a review of the documents subsequently submitted by the previous BAC chairman revealed deviation from procurement rules which rendered the transactions void for being contrary to law.
While upholding the City Legal Officer’s stand on violation of RA 9184, the COA held that LXS Builders still deserved to be compensated based on the fair value of services rendered.
“Verily, non-compliance with the procedures on competitive public bidding may render the contracts void, if not illegal. Be that as it may, the city cannot evade payment and unjustly enrich itself, especially when it admitted in its Answer, that contracts for the subject transactions had been executed by it and LXS,” the COA said.