THE Commission on Audit has granted the petition of a construction firm seeking payment from the city government of Valenzuela of the arbitral award amounting to P17.4 million representing the balance of its contract on a public works project completed way back on June 17, 2004.
In its nine-page decision released last week, the COA en banc held that claimant RC Ramos Construction Corp (RCRCC) is entitled to recover the judgment cost based on the final decision of the Construction Industry Arbitration Commission (CIAC) dated July 24, 2014.
“The validity and propriety of the claim for payment were passed upon by the CIAC in the decision subject to the claim, a duly certified copy of which has been submitted to this Commission,” the COA said.
Based on the petition, RCRCC won the P48.57 million contract for the construction of a three-level school building for the Valenzuela City Central High School in Barangay Malinta in 2004.
The total project cost increased to P49.956 million by the time it was completed because of Change Order No. 1, which required a modification that altered the total by P1.05 million.
Based on the contractor’s claim, it was paid the Progress Billing No. 1 for 66.93 percent of the project worth P29.55 million, but its demand for payment of the balance went unheeded, resulting in the filing of arbitration proceedings with the CIAC.
COA noted that in 2007, the Regional Director of the Department of Public Works and Highways-NCR found the constructed school building to be “grossly overpriced” based on the DPWH Standard Unit Costs. It added that the “as-built estimate” for the structure was only P17.43 million.
On November 9, 2007, auditors issued a Notice of Suspension on the payment for the first billing and required submission of additional documents.
However, the city government did not present any evidence before the CIAC, opting instead to rely on its motion to dismiss.
Regardless of the reported overprice and the existence of a notice of suspension, the COA said the city is now bound by the arbitral ruling after it attained finality.
“Under the doctrine of finality of judgment or immutability of judgment, a decision that has acquired finality becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact and law,” the commission said.
