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COA: Occidental Mindoro mayor cheats gov’t by splitting vehicles contract

Nov 1, 2015 @ 18:03

Abra De Ilog Mayor Eric Constantino from Occidental Mindoro split the contract for the purchase of two Isuzu vehicles to get away with proper procurement rules.

In a 2014 report, the Commission on Audit (COA) said Mayor Constantino approved the purchase requests for two Isuzu light duty trucks worth P2.755 million in Oct. last year.

To do away with the requirement for public bidding, the mayor split the purchase into two using two different sources of funds.

State auditors said the two requisitions were made by Mayor Constantino for the purchase of two units Isuzu NQR – 71R Light Duty Truck amount to P1,377,895 each, and that both were purchased at or about the same time.

But the COA said splitting transaction especially if these are the same product is prohibited under Republic Act 9184 or the procurement law.

“By splitting the requisitions, the Bids and Awards Committee (BAC) evaded the holding of pre-procurement conference and advertisement of the Invitation to Bid (ITB) in a newspaper of general nationwide circulation required for procurement of goods costing more than P2,000,000.00 in violation of Sections 20.2 and 21.2.2 of the Implementing Rules and Regulations,” the COA said.

“Section 54.1 of the IRR of RA 9184 strictly prohibited splitting of government contracts. Splitting of government contracts means the division or breaking up of contracts into smaller quantities and amounts, or dividing contract implementation into artificial phases or sub-contracts for the purpose of evading or circumventing the requirements of R.A. 9184 and its IRR, especially the necessity of public bidding and the requirements for the alternative methods of procurement,” it added.

The COA also noted several procurement violations in the two declared failed biddings which paved the way for direct contracting.

For one, the Bids and Awards Committee (BAC) failed to post an invitation to bid in the PhilGEPS website for seven calendar days starting on date of advertisement.

The BAC also failed to convene at least one pre-bid conference to explain any of the requirements, terms, conditions, and specifications in the Bidding Documents.

In all stages of the negotations, the BAC failed to invite observers from COA, non-government organizations and duly recognized private groups knowledgeable on the procurement.

Also, the BAC did not determine the causes for failure of bidding by conducting mandatory review and evaluation of the terms, conditions, and specifications in the bid documents.

There was also no second invitation to bid after the first failed bidding.

There was also no evidence to show that the BAC has a list of suppliers to choose from for direct contracting, or that they invited different suppliers to ensure competition.

“There was no quotation of prices from Isuzu Alabang raising doubts on the integrity of the submitted abstract of canvass,” the COA said.

The purchase order (PO) also did not indicate the mode of payment and date of delivery.

“The check payment was made on November 20, 2014 although the PO was perfected only on December 16, 2014, the date the supplier signed the PO, which is rather odd,” COA said.

The municipal government did not require performance bond and warranty security from the supplier, which means the “interest of the Municipality was not protected.”

There was also no delivery receipt/invoice to cover sales of light duty trucks, “adding doubts on the regularity of the procurement.”

In a reply, the municipal government justified the splitting of government contracts because of the different sources of funding – the development funds, and the local disaster risk reduction and management funds.

The audit agency said the contract should not be split because the goods were requested by one person only and that the funds used were both local funds.

“We recommend that the BAC refrain from splitting of government contracts and ensure compliance with the requirements of RA 9184 and its Implementing Rules and Regulations. Be mindful that any form of splitting to do away with and circumvent control measures promulgated by the government is a violation of the procurement law, regardless of whether or not loss or damage has been sustained by, or caused to, the government,” the audit agency said.

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