THE Commission on Audit has granted the petition of a construction firm for payment of a portion of renovation work it did for the Cancer Center Facility of the Baguio General Hospital and Medical Center (BGHMC) albeit, for less than half of the P17.66 million it asked for.
CE Padilla Construction Inc. will instead receive P7.15 million after the COA-Cordillera Autonomous Region (CAR) Technical Services found a cost variance of P13.195 million.
This means the team’s technical evaluation showed the fair cost of the project should be P51.39 million against the contract cost of P64.585 million on which the contract based the petition.
Records showed the construction firm landed the project on Feb. 3, 2014 on a quotation of P64.585 million, or slightly below the approved budget of P65 million.
A mobilization fee of P9.688 million representing 15 percent of contract was paid by BGHMC on June 13, 2014.
However, the hospital issued an additional work order on Aug. 1, 2014 for P7.41 million, which raised the total contract cost to P69.31 million.
On Dec. 17, 2015, the contractor was paid P32.57 million for its first progress billing.
The project was completed on April 27, 2016 when the BGHMC issued a certificate of completion stating that the work was inspected and found to be 100 percent finished in accordance with approved plans and specifications.
The audit team, however, issued an audit observation memorandum dated July 12, 2016 informing the hospital management of the technical evaluation of the project.
CE Padilla contested the lower cost assessment, saying it had nothing to with the setting of the budget for the renovation job and merely complied with the rules by submitting a quotation lower than the approved budget.
Having passed official inspection and acceptance of the finished project by the BGHMC, the contractor said it had complied with its end of the deal and is entitled to pay.
In its decision, the COA Commission Proper acknowledged that the contractor has satisfactorily performed the work and thus, is entitled to compensation. But it said that allowing the payment of the full billed amount despite overpricing would constitute excessive expenditure.
“Excessive expenditure is disallowed in audit as it is against the policy that government funds and property should be spent or used solely for public purpose. This being so, the CEPCI (CE Padilla) cannot demand payment for the whole contract price. The overprice or excess amount should be deducted from the contract cost,” the COA said.
