THE Commission on Audit has denied, for lack of jurisdiction, a P59.92 million claim a private contractor filed against the Pasig City government.
The COA en banc held that the claim was prematurely filed since it was based on a 2023 ruling of the Construction Industry Arbitration Commission (CIAC) that the city government has challenged through a petition for certiorari, which remains pending with the Court of Appeals.
“Since the city was able to file its appeal within the reglamentary period, the CIAC award is not yet final and executory, thus, not yet ripe for adjudication before this Commission. In fact, even if the CIAC award may be considered final, the same is still under contest by the city, thus, still outside the jurisdiction of this Commission,” the COA said.
The claim was based on the 2017 bidding for the construction of the proposed Pasig City Sports Center Arena (Phase 2–structural works) in Barangay Rosario, Pasig City, which was awarded to Phesco Inc.
The P338.9 million contract was signed on November 21, 2017 between then-mayor Robert Eusebio, representing the city government and Phesco general manager Robert Ynson, representing the contractor.
The commission noted that the project was supposed to be completed by May 4, 2019 but on June 6, 2019 a Change Order No. 1 was issued for additional works and services, which jacked up the contract cost to P371.09 million. The Office of the City Engineer issued a certificate of completion dated November 8, 2019.
On March 17, 2022, Phesco sent a final demand for payment but the city government informed the contractor that the project had been referred to the COA for a special audit, with assurances that payment would be released once the audit is completed.
Phesco filed for arbitration with the CIAC, which ruled on March 27, 2023 ordering Pasig City to pay P57.45 million with six percent interest until paid in full. The writ of execution was issued on June 13, 2023, prompting the sheriff to issue a notice of garnishment against the assets of the city at the Land Bank of the Philippines (LBP) to satisfy the awarded cost.
However, both the bank and the city government told the contractor to file a claim with COA.
In its answer with counterclaim on October 11, 2023, Pasig City asked the commission to dismiss Phesco’s petition for lack of merit and asked that the contractor be ordered to pay the sum of P43.96 million as liquidated damages on the ground that the sports center remained unfinished as of October 11, 2023, almost four years after the last approved completion date of November 10, 2019.
The commission, however, said it lacks jurisdiction over the claim until the CIAC award becomes final and executory; hence Pheco’s petition must be dismissed.
