The Commission on Audit (COA) has flagged the Department of Health (DOH) over the P1.93 billion procurement of goods, infrastructure projects, and consultancy services that "deprived the government of the most advantageous prices and resulted in doubtful payment transactions and significant delays in project completion."
In its 2022 audit report, COA said that the DOH failed to properly comply with Republic Act No. 9184, the Government Procurement Reform Act, and its Revised Implementing Rules and Regulations (RIRR), which resulted in "doubtful" payments of P1,932,520,634.94.
It said there were disadvantageous provisions of Covid-19 vaccine supply agreement that placed the government in a vulnerable position, and there was no other choice but to accept since there was a high demand for vaccines and very limited supply.
Citing an example, COA said the supply agreement for the procurement of five million treatments of Sputnik V, Gamaleya Covid-19 vaccines for the National Capital Region (NCR) limited the liability of the vaccine supplier should there be delays in delivery.
It said there were also "confidentiality and non-disclosure" provisions in the vaccines contract as well as in the purchase and supply of one million doses of Sinovac vaccine which "disregarded the basic precept of transparency in government transactions."
"In light of the fact that there was a global shortage of vaccines at the time and supplies were limited, the government was put in a position where it had to accept the terms and conditions of the manufacturers on confidentiality in order to launch a Covid-19 Vaccination Program immediately," COA said.
It found several procedural deficiencies, such as an awarding of a contract to an ineligible bidder in the NCR. The failure of the contractor to provide competent and experienced materials engineer as one of the key personnel for construction and failure to submit original bid security cast doubt on the P208,279,888.87 payment made, it also said.
At the same time, COA said there were also several instances when the DOH resorted to inappropriate modes of procurement. It said in Region I, the DOH made purchases through reimbursement and spent P1,009,583.33. In Regions II, III, and XI, the DOH made procurements using petty cash funds worth P15,793,183.39, P577,308.20, and P31,369, respectively, it said.
COA pointed out delays in the procurement processes. It said that in the Cordillera Administrative Region (CAR), there was a delay in the execution of contracts ranging from two to 119 days from receipt of Notice of Award (NOA) for the Baguio General Hospital Medical Center (BGHMC), which cost P498,766,713.74. The same was true in Region VI for the Western Visayas Sanitarium and General Hospital (WVSGH) worth P7,852,664.33, it said.
"These deficiencies may be attributed to the voluminous number of bidding activities being conducted by the DOH, lack of judicious and meticulous procurement planning, failure to conduct early procurement activities, and lack of relevant trainings of personnel assigned in procurement activities, among others," COA said.
"In sum, the noted deficiencies were not only contrary to the pertinent provisions of R.A. No. 9184 and its RIRR but also deprived the government of the most advantageous prices, resulted in doubtful payment transactions, and had caused significant delays in the project implementation, delivery and distribution of the necessary goods and services to the public," it stressed.