Over P230 million in procurement transactions for various supplies and materials of the Philippine Coast Guard (PCG) have been flagged by the Commission on Audit (COA) for possible violation of the Government Procurement Reform Act.
The COA , in its 2019 annual audit report for PCG, also disclosed that 25 projects worth P462.87 million have “zero" percent accomplishment since 2014 to 2018. Some P7.3 million for 12 of the delayed projects were paid by the PCG as mobilization fee to contractors but have yet to be recouped.
According to COA, 24 more PCG projects costing P148.30 million are still ongoing since 2014 to 2018 but were not terminated.
Auditors lamented that officials of the PCG failed to blacklist the contractors involved or impose liquidated damages for the delays.
“Various supplies and materials in the total amount of P230,153,405.84 were procured through alternative methods of procurement; out of which, a total P108,532,311.58 could have been procured thru public bidding, contrary to Section 10, Rule IV of the Revised RIRR of RA No. 9184,” the audit report submitted to Admiral George V. Ursabia Jr., PCG commandant, disclosed.
The audit team headed by Director Emma U. Escusa said RA 9284 or the Government Procurement Reform Act said alternative methods of procurement were resorted to by PCG to purchase some P230.15 million in supplies and materials.
However, under RA 9184 or the Government Procurement Reform Act, such methods of procurement may be resorted only “in highly exceptional cases. The conduct of competitive public bidding is preferred under the law.
COA chided the PCG for resorting to “splitting of purchases” to avoid the conduct of competitive public bidding.
Coast Guard officials denied that splitting of small value procurement is intentional, adding that in the case of the procurement of daily food requirement for the canine unit, small value procurement was observed while the public bidding was still on-going.
“Twenty five various projects amounting to P462,878,543.91 have “zero’ percent completion or not yet started since CY 2014 up to CY 2018; of which, 12 were granted 15 percent advance payments for moblization totaling P7,342,294.39 and still unrecouped,” said COA.
State auditors said disclosed that the unrecouped advance payments were made to contractors assigned to construct lighthouses in Itbayat, Batanes, P492,102.12 advance payment; Balabac, Palawan, P1,291 million; Malahabang, Lanao del Sur, P799,642.79 and Puerto Princesa, Palawan, P1.11 milliion, among others.
“Likewise, 24 projects amounting to P148,307,539.43 which are still on-going since CY 2014 up to CY 2018 were not terminated, and the contractors thereof were not considered blacklisted nor liquidated damages imposed for the delays, contrary to Annex E and Annex I of the RIRR of RA NO. 9184,” COA stated.
Auditors slammed PCG for failing to institute proceedings to terminate the projects despite the failure of contractors to finish them.
“Failure to close monitoring these projects and demand refund of advance payments to concerned contractors could lead to loss of government funds,” the state audit agency warned.
The PCG vowed to pursue recommendations made by COA with the PCG Contract Termination Review Committee chaired by RADM William Isaga convening the team to review the contracts violated by assigned construction firms.