2018 COA Reports: Irregularities found in const’n of Caramoran LGU building
Caramoran, Catanduanes  ·  
posted 28-Aug-2019  ·  
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A team from the Commission on Audit provincial office has found irregularities in the bidding and construction of the new municipal building in Caramoran town that was started during the term of former Mayor Agnes Popa.

The story began in 2017 when the municipal government secured a P69-million loan from the Land Bank of the Philippines, payable within 15 years inclusive of a two-year grace period on the principal and with the amount to be released in five instalments.

On Sept. 4, 2017, the LGU entered into a P1.491-million contract with a consultant for the preparation of detailed architectural and engineering design of a new three-storey municipal building with multi-purpose hall.

Auditors, however, noted that the consultant was paid P753,004.00 on Oct. 17, 2017 only for preliminary design documentation, detailed design and detailed design documentation.

The consultant did not deliver the Soil/Geotechnical Investigation Report, which should have been submitted 15 days after the start of the project. The consultant was supposed to dig bore holes, conduct a standard penetrometer test, secure boring samples and provide data on the soil strata underneath the structure, its allowable soil bearing capacity, and evaluation of foundation to be used for the structure.

“The non-delivery of soil investigation report was a major deficiency that weakened, if not defeated, the purpose of hiring consultancy services,” the COA stated. “More so, it endangered the safety and structural strength of the new municipal building because the allowable soil bearing capacity was not determined.”

The management should have instituted action against the consulting firm for its failure to fully perform the contract, by forfeiting its performance security, imposing liquidated damages and terminated the contract itself.

The Commission also discovered that several information or items were omitted by the Bids and Awards Committee (BAC) in the Request for Expression of Interest (REI) in its PhilGEPS posting.

“The missing information in REI might have affected negatively the prospective bidders’ decision to respond to the LGU’s request/invitation,” it noted. “As demonstrated by the outcome, only one bidder responded to the request, hence the opportunity to obtain the best possible quotation was not attained.”

The posting of two different schedule dates for each procurement activity, the audit observed, created confusion among prospective bidders as the information was misleading and was seemingly designed to lose the interest of bidders.

“Moreover, the different set of dates provided to COA gave rise to doubt Management’s sincerity in promoting clean and transparent bidding process,” it added.

According to the audit report, the Bids and Awards Committee (BAC) advertised the Invitation to Bid for the construction of the new municipal building on Nov. 23, 2017 and proceeded with the opening of the lone bid on Dec. 15, 2017 despite the absence of the soil investigation report.

The project was awarded on Jan. 3, 2018 and the contract signed eight days later at a cost of P68.94 million with a duration of 360 calendar days.

However, before the contract became effective on Jan. 18, 2018, the Municipal Mayor issued Variation Order No. 1/Suspension Order on Jan. 15, 2018, on the grounds that the design of the building had a defect on the assumed Soil Bearing Capacity, thus needing redesign, and that the whole building will be redesigned from the original three storeys to five storeys.

“We find the reasons behind the issuance…not acceptable,” the audit team said. “Suspension order for construction works that had not yet started was untenable (while) the alleged defect on the assumed Soil Bearing Capacity had no basis.”

On Feb. 5, 2018, the mayor issued a Resume Order, to take effect on Feb. 12. But on May 23, 2018, the contractor filed a request to move the duration of the contract period from the original Jan. 18, 2018-Jan. 12, 2019 to June 1, 2018-May 27, 2019.Surprisingly, the request was granted by the mayor, the report stated.

“The approval of the request was disadvantageous to the LGU because the number of days delayed will be shortened thereby reducing the payment of liquidated damages by the contractor,” the COA stressed.

The auditors maintained that the revised expiry date should be Feb. 6, 2019 and based on the 42.27% accomplishment of the contractor as of April 30, 2019, the contractor is already liable for at least P3.3 million in damages due to the 83 days of delay.

The other significant findings in the audit of last year’s transactions at Caramoran LGU are the following: absence of hiring and rehiring guidelines for 118 job order personnel; absence of garage for motor vehicles and heavy equipments, including a loader, excavator, 10-wheeler low-bed truck, vibrator roller, dump truck, tractor head, and transit mixer bought on a P28.5 million loan from the Development Bank of the Philippines (DBP); absence of authority to close the controlled dumpsite; 68-percent accomplishment of development projects; and, low  55% collection rate on real property and Special Education Fee taxes.

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