P459B worth of DPWH projects awarded to firms with questionable capacity --COA

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The Commission on Audit (COA) has flagged 11,391 Department of Public Works and Highways (DPWH) projects worth P459 billion, which were awarded to contractors with questionable financial capacity.

"Review of the 27,094 sampled infrastructure contracts disclosed that 11,391 contracts with an aggregate contract cost of P459.262 billion involved bidders whose submitted Statements of Ongoing Government and Private Contracts did not completely reflect their ongoing and awarded but not yet stated contractual commitments," according to a COA Audit Report quoted on a "24 Oras" report by Maki Pulido.

"The incomplete declaration of ongoing contractual commitments resulted in Net Financial Contracting Capacity (NFCC) computations that did not fully consider the bidders’ outstanding obligations, thereby overstating their available contracting capacity and affecting the reliability of financial eligibility assessments during the post-disqualification," the COA report added.

The report said that 198 contractors should not have been given additional contracts because their previous contracts have not been completed.

"Audit disclosed that 198 contractors awarded to certain contractors in DPWH North Manila DEO in NCR initially met the NFCC requirements during the preliminary examination of bids. However, the same contractors were subsequently awarded multiple contracts under the Early Procurement Activities," COA said.

"When these contracts were considered collectively, the contractors’ remaining NFCC was no longer sufficient to cover the cumulative ABCs, indicating that their available contracting capacity had been exhausted," it added.

The incomplete declaration of ongoing contractual commitments resulted in Net Financial Contracting Capacity (NFCC) computations that did not fully consider the bidders’ outstanding obligations, thereby overstating their available contracting capacity and affecting the reliability of financial eligibility assessments during the post disqualification.

One of the contractors was awarded four more contracts worth P530 million, even though it should have been eligible to take on only P81 million worth of projects.

Another contractor secured seven contracts worth P1 billion, despite being eligible to take on only P189 million worth of projects.

According to the COA report, the following regions recorded the highest number of contracts awarded to bidders with incomplete documentary requirements:

• Region I – 1,893 contracts worth P45.76 billion
• Region X – 1,328 contracts worth P63.55 billion
• Region IV-A – 1,289 contracts worth P41.65 billion
• Region II – 1,213 contracts worth P43.55 billion
• Region III – 1,134 contracts worth P40.28 billion

MIMAROPA (Region IV-B) had the highest total value of contracts awarded to bidders with incomplete documents, at P65.70 billion across 419 contracts.

The DPWH said it validated the contractors' Net Financial Contracting Capacity (NFCC) during the post-qualification stage. It explained that the projects had not yet been awarded when the contractors submitted their bids, so these were not included in the NFCC computation.

The COA, however, said the DPWH may review bidders' qualifications at any stage of the procurement process.

The DPWH also had information that the contractors had already secured other projects, which could serve as grounds for reassessing their capacity to take on additional contracts.

“The findings of the COA in their Audit Observation Memoranda covering prior years are forwarded to the concerned Implementing Office so they can address the same. We shall coordinate with the IOs on the status of their compliance and will share an update once we have their responses,” said DPWH Secretary Giovanni Lopez.

GMA News has sought comment from former DPWH chiefs Manuel Bonoan and Vince Dizon, but has yet to receive a response. —LDF, GMA News