A COMPLIANCE audit on the Clark International Airport Corp. (CIAC) has flagged the procurement of 22 desktop and laptop computers in August and December 22 for “contract splitting” and excessive cost per unit of the 12 laptops purchased without public bidding.
Government auditors said 10 laptop computers were acquired at the total cost of P800,000 through competitive bidding but a second batch of 12 laptops worth P960,000 were bought using alternative mode or “shopping.”
“Review of the approved final APP (annual procurement plan) for CY 2022 …revealed that the estimated budget of P1.76 million for the procurement of laptop/desktop computers was split into two projects. Splitting of contracts is prohibited under Section 54.1 of the RIRR (Revised Implementing Rules and Regulations) of RA 9184,” the audit team said.
A compliance audit of government-owned or controlled corporations (GOCCs) reviews observance of the provisions of RA 9184 or the Government Procurement Reform Act in the procurement of goods and services. It is issued separately from the Annual Audit Report (AAR) which covers all the financial transactions and operations of the agency.
Other than splitting into two transactions, auditors said the amendments to the specifications and documentation were generally compliant with RA 9184.
The 12 Lenovo Idea Pad (Slim) were bought at P79,770 and fully delivered as of January 19, 2023, while payment was made on January 30, 2023.
To validate the reasonableness of the contract price for the procurement …the audit team requested quotations from three bona fide suppliers of the Clark Development Corporation (CDC) …based on the specifications provided by the CIAC.
Each of the three suppliers submitted per-unit prices that were lower than what CIAC paid for its purchases with the variance ranging from P17,770 to P20,470.
All taken together, the COA said the CIAC could have saved between P213,240 to P245,640.
“The Corporation did not obtain the most advantageous price for the government, resulting in foregone savings …inclusive of a three-year premium care warranty for parts and services which was way better than the one-year warranty offered by RGW Computer Trading,” the audit team noted.
It added that the chosen supplier had no brick-and-mortar store and the declared business address was actually the supplier’s residence aside from being only a few months old at the time of the award of the contract, having registered with the Bureau of Internal Revenue only on February 9, 2022.
In addition, auditors found that each laptop had a Microsoft Office Home and Student 2021 software which they said is barred by Microsoft’s Software License Terms from “commercial, non-profit, or revenue-generating activities.”
“Simple stated, the use of Microsoft Office Home and Student for commercial, non-profit or revenue-generating activities is illegal because it violates the License terms,” they pointed out.
Reacting to COA’s recommendations, the CIAC president and chief executive officer agreed to “cause the refund of P230,820 by responsible officials and employees… for the overpriced transaction that was deemed excessive expenditure.”
