ILIGAN CITY – The local government unit here has terminated its contract with a Tacloban City-based contractor for undue delay and its failure to complete on time the construction of the P583-million new public market project in Barangay Pala-o.
THE construction of the modern three-story Pala-o Public Market is temporarily stopped following the termination of the contractor's contract effective April 14, 2023 due to undue delays. (Bonita L. Ermac) The termination was effective April 14, 2023 following a thorough review and investigation of the project delay. The contract agreement was executed between the city government of Iligan City represented by then mayor, now Rep. Celso G. Regencia, and B.M. Marketing, a construction firm with business address at 116 Salazar St., Tacloban City, represented by its proprietor, Edgar A. Tui, for the contract amount of P583,468,951.01 on Feb. 13, 2020. The P583-million Pala-o Modern Market is a three-story building with a greenery on the roof deck. It has a floor area of 2,218-square meters, 1,269 market stalls, and 132 parking spaces available around the building. The old Pala-o Market was built in 1960. The Notice to Proceed was issued to B. M. Marketing on Feb. 20, 2020. The parties stipulated a contract duration of 540 calendar days. The project’s completion was originally expected by Aug. 19, 2021, but was extended to 858 calendar days with the adjusted completion date set on Nov. 3, 2022. Adjustment of the original target completion date was the necessary consequence of project delays occasioned by the contractor’s seven requests for contract extension. B.M. Marketing requested 74 days extension dated March 24, 2020; 65 days Oct. 30, 2020; 14 days Dec. 7, 2020; 68  days July 23, 2020; 37 days Dec. 3, 2021; and 60 days Jan.  20, 2022. All these six requested extensions were approved. B.M. Marketing’s first request for time extension was based on the issuance by then Mayor Regencia of EO No. 32, Series of 2020, regarding the Enhanced Community Quarantine. Its second request for time extension was based on the issuance by the mayor of EO 98, Series of 2020, regarding imposition of the Modified enhanced Community Quarantine. The contractor’s third request for time extension was predicated on a lockdown imposed by the IATF after one of the workers tested positive for Covid-19 and the rest of its crew quarantined for 14 days. Furthermore, B.M. Marketing cited unfavorable weather conditions for its fourth and fifth requests for the time extension and delay in the delivery of materials for its sixth request for time extension. Atty. Roberto Padilla of the Contract Termination and Review Committee (CTRC) said the committee was created to review the implementation of the construction of the Pala-o Public Market. He said the decision to terminate the contract came after a thorough review and investigation as shown by the foregoing seven requests. About 318 days were added to the original stipulated project duration, all occasioned by the contractor's six requests for the time extension. In denying the contractor’s seventh request for the time extension, the city's Project Implementation Unit (PIU) headed by Engr. Leonor Actub cited several acts attributable to B.M. Marketing which caused project delay, among which are the following: Slab, deck, and gutter waterproofing: The contractor failed to apply waterproofing on the second floor of the building; the contractor can’t invoke this as cause of delay, for it was remiss of its duty to apply waterproofing until ordered by the procuring entity (PE). The resultant delay was attributed to the contractor’s own fault. Septic tanks, STP, and pumps: The contractor executed changes on the plans without approval of the PIU/CE; the contractor failed to submit a revised plan and an approved variation order for the item of work, causing project delay. Stainless steel hand and grab railings: The contractor executed these items of work without approval of the PIU/ CEO; the contractor refused to implement item of work in the final approved plans. Electrical main meter and sub-meters: The contractor purchased items which were not accepted by the PE due to its poor quality; the contractor violated the requirement that materials or items should be first approved before delivered at project site. Electrical works: The contractor violated the approval of materials first before acceptance for usage policy. The contractor used materials not in accordance with usage policy. The contractor used materials not in accordance with the final plans and specifications and applicable building code of the Philippines. The contractor was unable to submit the mill/manufacturer’s certificate for materials which were not subjected to testing. On Jan. 5, 2023, the contractor’s motion for reconsideration of its seventh request for extension dated Dec. 20, 2022 of about 105 days was denied by Mayor Frederick W. Siao. Siao said his decision is not a political decision nor political attack since this project was created and started by Regencia and his allies. The Commission on Audit, in its Audit Observation Memorandum dated Jan. 12, 2023 addressed to Siao, recommended to the city government of Iligan (CGI), among other measures, to "evaluate the contractor's performance and compute and hold the contractor for liquidated damages pursuant to the provisions of the revised implementing rules and regulations (RIRR) of RA 9184, otherwise known as the Government Procurement Reform Act. Siao reiterated that the public market project will be completed for the people of the city whose money/funds used are owned by Iliganons. Thus, they are ensuring the safety of the people that will occupy and buy in the  market. Meanwhile, Padilla said their record shows that the project is 64 percent complete and has paid the contractor 50 percent of the contract price. "We have with us, still P291 million of the P583 million contract amount. Hopefully, this will be enough to complete the project," added Padilla.