P108M Coast Guard procurement lacked public bidding: COA

THE Commission on Audit has raised questions regarding the 2019 procurement of “various supplies and materials” worth P108.53 million by the Philippine Coast Guard, citing lack of public bidding.

Government auditors said the transactions bore hints of irregularity because of “contract splitting” or the breaking down of procurement into amounts below P1 million, the threshold sum for government purchases requiring public bidding.

“Our review and verification disclosed that out of the 493 POS/WOs (purchase orders/work orders)…208 POs amounting to P108,532,311.58 were found to have violated the prohibition on splitting. Various supplies and materials could have been procured through public bidding instead of shopping or small value procurement,” the audit team said.

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Among the PCG units tagged in the audit report were CG Surface Support Force on 51 transactions with the total value of P31.634 million; Headquarters Support Group on 23 contracts worth P11.589 million; CG Education, Training, and Doctrine Command with 28 contracts worth 13.813 million; CG K9 Group with 15 transactions worth P13.38 million; and CG Medical with 21 transactions worth P9.21 million.

Auditors noted that the purchases involved similar kinds of items bought in small quantities within in the same month or at loose intervals in succeeding months.

“Apparently, splitting of purchases was done to avoid using the competitive public bidding as mode of procurement. POs showed amounts with less than P1 million to evade the requirement of public bidding,” the COA pointed out.

The commission stressed that the requirement for public bidding is to ensure that the agency obtains reasonable prices to maximize scarce resources of the government.

The PCG management invoked good faith, saying a lot of the items involved were not available with the Procurement Service of the Department of Budget and Management (PS-DBM) while each transaction was connected to different activities of the units.

It added the CG Medical’s supplies purchases were dependent on the number of patients seeking medical care while those of CG  K9 Force were necessary since the trained dogs had to be fed even while a public bidding for the feed supplier was under process.

The COA, however, reminded the PCG command that RA 9184 or the Government Procurement Reform Law has strict requirements for public bidding.

Two former PCG officials are facing graft charges before the Sandiganbayan on allegations of fraud regarding irregularities in the procurement of small items and supplies.

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