Makati City told: Pay Hilmarc’s P53M balance of contract cost

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    THE Commission on Audit (COA) has ordered the city government of Makati to pay private contractor Hilmarc’s Construction Corp. (HCC) the balance of its 2013 contract to install/improve the air-conditioning system of the Makati City Hall 2 amounting to P53.2 million.

    COA chairman Michael G. Aguinaldo and Commissioners Jose A. Fabia and Roland C. Pondoc ruled to grant Hilmarc’s petition for money claim despite Makati’s objection on the ground that the completion of the project was delayed by eight months and that some support documents were not submitted.

    The COA held that the documents required including the annual procurement plan (APP), project procurement management plan (PPMP), attendance sheet for the pre-procurement conference and bidding conference and the posted copies of the Notice of Award and Notice to Proceed were all related to the bidding and procurement processes, all which should come from the city and not the contractor.

    Regarding the issue of alleged delay, the contractor was able to present a letter from the city government approving its requests for extension.

    “While the absence of documents may show violations in the procurement procedure, equity dictates that HCC, which had no control over the procurement process, should not be blamed for the deficiency. Thus, it should be compensated for what it had performed.

    Otherwise, it would result in undue enrichment on the part of the city,” the COA said.

    Hilmarc’s won the contract after a public bidding held on January 31,2013 with its lowest bid of P145.23 million against the project budget of P155 million.

    The contract was formally executed on February 21, 2013 but due to some revisions in the program of work, the contract price went down to P142.45 million.

    HCC said the project was completed and turned over to the city government on July 19, 2014, which was validated by the COA’s Technical Service Unit (TSU) NCR, Local Government Sector.

    The award of the contract and the turnover after completion all happened under the administration of former mayor Jejomar Erwin Binay who stepped down on June 30, 2015.

    Hilmarc’s said it only received P89.26 million in payments leaving a balance of P53.2 million. It sent formal demand letters dated February 23, 2016 and May 8 and July 18, 2017 but the city withheld payments citing delays and missing documents.

    Based on records the first demand letter was received by the city government under then mayor Romulo Peña who served his predecessor’s unfinished term ending June 30, 2016.

    The last two demand letters were received by the city under incumbent mayor Mar-Len Abigail Binay-Campos.

    Failing to collect from the city government, the contractor opted to file a petition with the COA to compel the city government to pay up.

    While the commission affirmed HCC’s entitlement to be paid the balance of the contract price, it turned down HCC’s claim for payment of compensatory interest, attorney’s fees and other expenses amounting to 10 percent of the claimed balance.

    “To grant the same is tantamount to recognition of penalty or indemnity for damages which is not within the authority of this Commission to decide but by the regular courts. Claims for damages cannot be presumed but must be duly proved with reasonable certainty,” the COA pointed out.

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