EIGHT years after completing a public works project for the Pasay City government, a contractor may finally get to collect payment after the Commission on Audit granted its petition for settlement of claim for unpaid billing amounting to about P11.9 million.
Claimant Vites Construction and Development Corp (VCDC) was awarded the construction project for the “Improvement of Drainage System and Concrete Pavement of Pag-asa Street, P4 Lower Area, Pasay City” in July 2017.
Based on an inspection report dated Dec. 7, 2017, the contractor completed the project to the satisfaction of technical inspectors from the City Engineering Office. This was backed by documents including statement of work and certificates of completion and acceptance.
However, when it billed the city government, a problem on funding source cropped up although the project was supposedly included in the list of civil works intended to be funded under a P2-billion loan drawn by Pasay City from the Philippine National Bank (PNB).
On Dec. 14, 2018 and Jan. 14, 2019, then Mayor Antonio Calixto wrote to the bank for the issuance of a promissory note in favor of VCDC which informed the local chief executive that the project was not listed in the city’s Local Development Investment Plan as well as the Annual Investment Plan hence, unfunded.
In its claim filed with the COA, the contractor argued that regardless of the errors of the city government, it had performed its end of the contract and thus, deserves to be compensated.
In its answer dated Feb. 22, 2023, the city government acknowledged its obligation and notified COA that it is not interposing any objection to the grant of the claim.
COA noted that the city violated procurement rules when it bid out and awarded a contract that had no prior approval for funding from the Sangguniang Panlungsod which greenlighted the project after its completion.
“While the absence of existing appropriation and available funds for the project rendered the transaction void … denying payment would be to allow the city to enrich itself at the expense of VCDC,” COA said.
It said the procedural defect in the contract cannot be taken against the claimant.
“The lack of compliance by the city with existing rules and regulations should not militate against the right of the petitioner to be paid for actual work performed and services rendered,” the Commission added.
