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Manila Bulletin devider Philippines devider National devider COA affirms P12.7-M disallowance on 'overpriced, substandard' road project in Davao City in 2010

COA affirms P12.7-M disallowance on 'overpriced, substandard' road project in Davao City in 2010

Published Oct 30, 2025 02:14 pm
The Commission on Audit (COA) has denied the petition of the Department of Public Works and Highways-Davao City District Engineering Office (DPWH-DCDEO) and affirmed its notice of disallowance (ND) on an “overpriced yet substandard” P12.7 million road rehabilitation project in 2010.
The DPWH-DCDEO contracted E. Gardiola Construction (EGC) for the "Rehabilitation/Improvement along Junction C.P. Garcia - Junction Magtuod Road, with Exception, Davao City" for P12,708,408.92.
The project was supposed to be completed within 90 calendar days but was done within 28 calendar days. As a result, EGC was paid P18,074,731.73 on April 30, 2010.
When the project was inspected by the COA’s Special Audit Team, it was discovered that the contract cost was 193.39 percent higher than its estimated cost of P6,571,464.75. The contract price was considered excessively high by P12,708,408.92.
The COA also said it was found that the approved and as-built plans failed to comply with the planning standards set by the DPWH as they did not indicate measurements and landmarks, and actual inspection of the project revealed that guardrails, road signs, pavement studs, and foundation blocks were deficient and substandard.
Thus, the payment was a subject of ND No. 14-006-101, which the DPWH-DCDEO appealed.
The DCDEO argued that the audit team did not include indirect costs such as cement, sand, and gravel as well as transportation and labor expenses.
The COA found the petition bereft of merit. "This Commission finds that the disallowance was properly issued," it ruled.
In this case, the COA said its audit team found that the price of guardrails and road signs were excessive, which was supported by actual canvass sheets and price quotations.
While it affirmed the disallowance, it excluded certain individuals from liability -- Engineers Gregorio Yee, Joselito Jamito, Cecilia Barrientos, Perry Neil B. Palacio, and Ma. Gloria G. Sorrera (bids and awards committee head); and Nelson B. Luayon (BAC Secretariat) and Restituto D. Mira.
The COA said: "Engineer Lorna Ricardo (District Engineer), Engineer Milagros Delos Reyes (Assistant District Engineer), Engineer Dwight Vincent Fernandez (Engineer III), Engineer Eduardo Villar, Engineer Lilibeth M. Sarmiento (Engineer II), Engineer Bernardo Engalan (Engineer II), and E. Gardiola Construction are hereby solidarily liable in the reduced amount of P11,503,266.98, while Rolly B. Tulayba remains liable under the ND in the amount of P3,122,460."
It also ruled that “the Prosecution and Litigation Office, Legal Services Sector, this Commission, is directed to refer this case to the Office of the Ombudsman for investigation and filing of appropriate charges, if warranted, against the persons liable for the transaction."
The 17-page decision was signed by Chairperson Gamaliel A. Cordoba and Commissioners Roland Cafe Pondoc and Mario G. Lipana.
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