Trader told to refund P24M to Cebu, Mandaue cities

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    THE Commission on Audit (COA) has ordered the Gampik Construction and Development Inc., contractor-supplier of decorative lampposts for the cities of Cebu and Mandaue, to refund P24.57 million in partial payments it has received after the agency disallowed the 2006 transaction in audit.

    In a resolution issued last January 27, COA chairman Michael G. Aguinaldo and Commissioners Jose A. Fabia and Roland C. Pondoc denied Gampik’s motion for reconsideration which sought reversal of COA’s December 29, 2016 decision.

    The assailed decision did not only affirm the notices of disallowance amounting to P13.335 million for Cebu City and P11.234 million for Mandaue City, it even increased the amounts to P23.97 million and P19.98 million, respectively.

    The COA also referred its case records to the Office of the Ombudsman for investigation and, if warranted, pushed for the indictment of those involved for violations of procurement laws.

    Gampik, represented by its chairman of the Board of Directors Gerardo Surla, objected to the 2016 audit ruling on the ground that there was no proof that the approved budget for the lampposts contract (ABC) was bloated as it cited that then Public Works Secretary Hermogenes Ebdane Jr. approved the alternative mode of procurement as well as the contract budget.

    The firm insisted that there was insufficient factual and legal basis to compel it to refund the partial payments.

    The COA Commission Proper stood its ground, noting that its Technical Services Office has verified the fair market cost of the lampposts through local suppliers and online vendors.

    The commission likewise said there was no basis to do away with the required public bidding since conditions did not warrant a resort to a negotiated procurement.

    At the same time, the COA noted that Ebdane distanced himself from the transaction.

    “Contrary to the argument of Gampik, Secretary Ebdane… refuted the complainant’s allegation that he approved the recommendation to resort to negotiated procurement even if the required conditions under this mode were not present,” the COA noted.

    With the determination that there was no public bidding and the city governments of Cebu and Mandaue ended up being billed higher for the lampposts, the COA said the payments were properly disallowed.

    “Movant cannot rely on the principle of quantum merit to escape liability because the above-mentioned contracts were found to be bloated or excessive… thus, illegal. Further, the projects did not undergo public bidding… hence the corresponding contracts were grossly disadvantageous to the government,” it added.

    While the commission denied the appeal, only the original disallowances of P13.335 million and P11.234 million were declared “affirmed with finality.”