THE Office of the Ombudsman has agreed to terminate the P498.79 million contract for its annex building project that started in 2013 but remains only 97.62 percent finished, with no further progress in the last eight years.
In the 2023 audit of the anti-corruption agency, government auditors noted that officials and employees of the Ombudsman moved in and occupied the structure on October 3, 2015 despite the absence of a formal turnover and acceptance.
This was after the contractor failed to complete the construction after seven variation orders resulted on revisions on the contract time that added 624 calendar days beyond the target completion date of July 13, 2013.
“Our verification of records revealed that only 97.62 percent has been completed and up to this date, no further progress has been made in terms of its completion, which is now counting more than eight (8) years from the date it was occupied and used by OMB,” the audit team said.
The contract was supposed to be terminated as early as February 3, 2015 but this was deferred to allow for the resolution of attendant issues prescribed under Annex T of the Revised Implementing Rules and Regulations (RIRR) of RA 9184, or the Government Procurement Reform Act.
According to the Ombudsman’s Project Management Team (OMB-PMT), there was no further work done on the structure since June 6, 2015.
“The contractor was no longer responding to calls for correction of defective/deficient accomplished works as well as repair/restoration of the building systems’ malfunctions and breakdowns. Also, it had failed several times to properly conduct the required testing and commissioning of installed system,” the COA noted.
The OMB-PMT said functionality tests on the Fire Detection and Alarm System, the Fire Protection and Suppression System, plumbing, and sanitary systems were not conducted.
It also found deviations from approved contract plans and specifications on sewage lines, defective circuit breakers for the outdoor air-conditioning units, excessive cracks along ceiling board joints, and improper surface preparation and anti-rust painting of structural steel components.
“Interview with concerned OMB personnel revealed that some defects such as repairs on the defective air-conditioning units were already resolved at the agency’s own expense and did not rely on the contractor due to urgency of the requirements,” auditors said.
The OMB-PMT added that “frequent breakdown of air conditioning units and elevator malfunctions” caused work disruptions.
On the other hand, auditors said that under the revised IRR of the procurement law, the Ombudsman had a right to take-over the project and undertake the necessary repairs with the cost subject to reimbursement by the contractor through the Performance Security.
Among the recommendations from the audit team were the full takeover of the project, imposition of liquidated damages against the contractor, and an action to perpetually disqualify from participating in any competitive bidding.
Other than pursuing contract termination, the Ombudsman management also agreed to collect the liquidated damages which the OMB-PMT calculated to have already accumulated to P40.65 million as of December 31, 2024.
