Road project contractor cleared of liability

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THE Commission on Audit has affirmed the validity of two notices of disallowance (NDs) issued on Nov. 6, 2012 against two road projects in Palawan with a combined contract cost of P5.14 million but cleared the private contractor of any liability.

In a five-page decision, the COA en banc granted the appeal of D. C. Sandil Construction and Realty Development, Inc. (DCSCRDI) that asked to be excused from the NDs issued by the COA Fraud Audit Office on the P3.74 million rehabilitation of the San Rafael-New Busuanga Section and the P1.403 million Patache-Macalachao Road project, both located in Busuanga, Palawan.

The Special Audit Team created by the COA-FAO in 2009 investigated 217 contracts that included the two road projects funded by P1.714 billion drawn against the royalties of the Malampaya-Camago gas field operations, and found irregularities in the procurement process.

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Among findings pertaining specifically to the two projects were the failure to post an invitation for contractors to bid for the infrastructure projects on the Philippine Government Electronic Procurement System (PhilGEPS), which is required under RA 9184 or the Government Procurement Reform Act, and supposed overpayment to the contractor.

In its appeal, the construction firm argued it had no involvement whatsoever in the failure of the provincial government to post the invitation to apply for eligibility to bid (IAEB) on PhilGEPS, hence there was an error in the assignment of fault.

It likewise invoked violation of due process, noting the special audit team submitted a conclusion without verification of original and as-built plans.

A subsequent inspection by a technical audit team confirmed the contractor’s claim that reinforced concrete box culverts and other accomplishments listed were existing and in conformity with specified dimensions in both the original and as-built plans.

More importantly, the assessment of the contract cost found that the road projects were both below the COA evaluated costs.

The COA Commission Proper said evidence was sufficient to exclude DCSCRDI from liability.

“DCSCRDI had no participation or responsibility in posting or the failure to post the IAEBs in the PhilGEPS, the same belonging to the procuring entity or the BAC (bids and awards committee), in particular. DCSCRDI reasonably deserves all the amounts paid to it,” the commission said.

Likewise, it held that public officials who approved and certified the release of payments for the road projects were excused from the requirement to refund the disallowed amount, based on the finding that there was no overpricing of the project.

However, it upheld the stand of the special audit team that the disallowance was properly issued on the basis of non-posting of the IAEB on PhilGEPS.

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