Lacson: ASEAN Preps Probe to Prevent Abuse of Procurement Law

An upcoming Senate investigation into alleged irregularities in preparations for the 12th Association of Southeast Asian Nations (Asean) summit last January should prevent abuses of the government’s procurement law, Sen. Panfilo M. Lacson said Saturday. 

Lacson, in a resolution he filed on the last working day of the Senate last Dec. 27, asked the Blue Ribbon Committee to look into the supposed irregularities and come up with solutions to patch loopholes in the procurement law and the anti-graft law.

“The unabated anomalies and corruption that oftentimes accompany contracts entered into not only by the national government but even by local government units tend to show the utter disregard by public officers of the pertinent provisions of Republic Act No. 9184 (Procurement Act) to the prejudice of the public coffers,” he said in his resolutions.

On the other hand, he said the practice of public officers of continuously violating RA 9184 just to enrich themselves at the expense of the public coffers “likewise show their apathy towards the provisions of the Anti-Graft and Corrupt Practices Act.”

Lacson said he intends to bring up the matter before the floor when the Senate resumes regular session on Jan. 21, 2008, and to schedule the hearings for it soonest.

In his resolution, he said the Cebu provincial government entered into a contract for the supply and construction of decorative lampposts and street lightings with Fabmik Construction and Equipment Company and Gampik Construction and Development Inc. for the summit.

The provincial government also entered into a contract for the construction of the Cebu International Convention Center (CICC) to serve as venue for the summit.

But after the summit ended, a local businessman alleged that the city government violated the procurement act when it entered into negotiated contracts with some public works contractors, in contrast to the law’s requirement for competitive bidding.

Worse, he said the CICC project also violated the provision of the Commission on Audit’s Circular No. 76-41, which prohibits the splitting of contracts so as not to increase project costs.

He said that while Cebu Gov. Gwendolyn Garcia held a presentation where the provincial government spent P581.273 million for the CICC project – way below the P637.4 million allocated for it, there were reports that she did not fully disclose the entire amount spent for the said project since WT Construction, one of the contractors for the said project, submitted an additional billing statement in the amount of P261,217,886.06;

“A careful perusal of the report made by Gov. Garcia would show that the said amount was not included in the P581,273,000 she previously stated which if added will make the total cost of the project balloon to P842,490,000 or way above the approved project cost for the construction of the CICC,” he said.

On the other hand, the Ombudsman in Cebu discovered that the average rate of P89,385 for the 683 lamps in Cebu City were priced higher than the amount stated in the import documents of Chinese manufacturer, Zhongshan Guzhen Yongan, when it shipped the said items to Gampik Construction and Development Inc.

He said each lamp at the time cost only 224 RMB, which when converted to local currency only amounts to P1,399.22.

Lacson also said the Ombudsman’s computations showed the government should not have paid anything higher than P6,737.79 for each unit, but the Department of Public Works and Highways accepted the P50,000.00 estimate per unit and bought them at that rate – “exclusive of installation resulting to a P43,262.21 loss to the government for each unit,:

In Mandaue City, which sought to procure 655 units, the Office of the Ombudsman discovered that the P224,000 lamps should have cost not more than P11,700 each inclusive of custom duties, transport and other cost excluding installation.

“Whereas, the losses suffered by the government were more pronounced in the purchase of the streetlights which were priced based on the prepared program of works and estimates for single, double and triple-arm streetlights at a cost of P72,500, P85,500 and P95,000 per unit, excluding installation cost. However, based on the import documents for said items, it should have only cost the government P7,536.96, P8,121.20 and P9,523.37 each, excluding installation, respectively,” Lacson said.