COA to PCG: Blacklist, penalize contractors for unimplemented projects worth P1.35-B

Published July 18, 2021, 6:20 PM

by Ben Rosario

The Commission on Audit (COA) has sought the blacklisting or imposition of penalties on Philippine Coast Guard (PCG) contractors that failed to implement some P1.358 billion worth of projects from 2014 to 2020.

Lighthouse in Batangas

In the recently-released 2020 PCG Annual Audit Report, COA lamented that despite violations committed by one of the contractors, it had been awarded by PCG with additional project contracts.

The state audit agency revealed that 89 projects have been delayed while P8.58 million in advance payment to contractors of 14 projects has yet to be recovered.

“Thus, the public is deprived of the benefits that could have been derived from the immediate and maximum use of the intended projects and could lead to loss and wastage of government funds,” the audit agency said.

At least 23 lighthouse structures and 13 radar station buildings in various parts of the country were among the projects that have not been implemented by various construction firms that received contracts.

The retrofitting of BRP Pampanga with an estimated cost of P155.21 million was not completed while the delivery of 43 units rescue rubber boats worth P42.31 million did not push through.

“Further review revealed that 29 infrastructure projects with aggregate contract cost of P560.84 million remained uncompleted or are still on-going as at year end despite their target completion period on CY 2014 up to CY 2020,” COA noted.

The audit agency added: “If not fully completed, it will result in wastage of government resources.”

State auditors chided the PCG for failing to initiate legal action against contractors that terminated the projects. Neither did the PCG impose penalties and liquidated damages for erring contractors as provided under the Government Procurement Act.

“The Management, instead of penalizing or blacklisting the contractor for the non-completion of the projects, awarded more projects to said contractor for implementation, posing more risks in loss of government resources,” audit examiners stated, referring to the C.M.O. Construction Services Corporation. (CMO) CMO was awarded 10 contracts for various construction jobs but was only able to finish one, the repair of the Coast Guard Procurement Service Office.

“The failure to terminate, blacklist the erring contractors, impose liquidated damages and recover the advance payments from contractors due to lack of adequate control mechanisms in project monitoring deprived the public of the benefits that could have been derived from the immediate and maximum use of the said projects and could lead to loss and wastage of government funds,” the audit report noted.

Auditors revealed that the audit observations in the 2020 AAR are the same ones pointed out to PCG officials in previous AARs.

“Lest management take legal steps to recover the advances to contractors, the Audit team will be constrained to issue a Notice of Disallowance,” COA warned.

Responding to the adverse audit observations, the PCG vowed to blacklist the following construciton firms: RM Mondares, JFJ Construction, FPN Construction and CMO Construction. It also vowed to follow the audit recommendations.