Drilon’s ‘golden’ watering system

It was, in the language of a government official who is an expert in the law on government procurement, “a bullet train ride” for the P13.5 million pork barrel project with a“manual irrigation system” for the Iloilo Esplanade as its centerpiece.

“Right from step one to step 10, almost every rule in Republic Act No. 9184 and its revised implementing rules and regulations were violated,” the procurement law resource person, who spoke on condition of anonymity, said.

Whoever was behind it must have been in a hurry to award the contract to a favored contractor, he said. He added that the entire procurement process took 38 days, which he likened to “a bullet train ride” because of its swiftness.02sep_1 front

The expert outlined the violations of RA 9184, which governs all procurement for supplies and services in the public sector, based on what he found out in an examination of the documents released by the Department of Public Works and Highways (DPWH) Regional Office No. 6:

  • The contract was advertised through an invitation to bid on Sept. 21, 2012 even before the funds reached DPWH Region VI.

The documents show that the Department of Budget and Management (DBM) issued the Special Allotment Release Order (SARO) on Sept. 17, 2012. It was received by DPWH central office on Sept. 27, 2012, which endorsed it to DPWH Region VI on Sept. 28, 2012. Under the law, the funds must already be available when a project is advertised for public bidding, the expert said.

He said the prior issuance of the SARO is not required before the procurement can start when a project is listed in the agency’s annual procurement plan or APP. This project isn’t listed in the APP of DPWH, he said. When the invitation to bid was posted, the SARO was still in transit. Hence, no funds available yet at the time it was advertised, he said. “That’s putting the cart ahead of the horse,” he said.

While this is not a “fatal” flaw, he said “speaks loudly that somebody powerful is moving the project forward.”

  • The invitation to bid was not published in a newspaper of national circulation at least once because it involved a contract exceeding P5 million.

RA 9184 and its revised implementing rules and regulations imposes a requirement for publication in a newspaper of national circulation for infrastructure contracts above P5 million. The DPWH Region VI did not present any proof this was complied with. TNT Libre also verified with the digital archive of The Manila Standard Today, which was designated as official newspaper for DPWH invitations to bid, for the dates Sept. 21 to 28, and this invitation to bid did not appear on any of these dates.

  • The Bids and Awards Committee (BAC) illegally raised the approved budget for the contract (ABC) after the pre-bid conference was conducted.

The invitation to bid issued on Sept. 21, 2012 placed the ABC for the project at P10,110,640.14. But subsequently, the ABC was changed twice and raised to P13,092,238.67 through what is known as a “bid bulletin”. This is illegal, the expert said. The bid bulletin is only for purposes of clarifying the bid documents to help bidders submit a responsive offer for the contract. The ABC is determined by the agency before it is advertised for bidding. “The BAC has no power to increase or decrease the ABC,” he said.

To support his contention, he cited Resolution No. 07-2005 of the Government Procurement Policy Board (GPPB) which oversees all government procurement activities and manages the PhilGEPS website. The resolution authorizes an “upward” adjustment of the ABC only after two failed biddings in which all submitted bids exceeded the amount, or no bids were submitted, or that a negotiated procurement after two failed biddings also resulted in failure.

“This will put the entire BAC in serious trouble,” he said.

  • The Notice of Award and Notice to Proceed to the winning contractor was not posted in the PhilGEPS website, which is again a violation of the revised implementing rules and regulations of RA 9184.

A key feature of the transparency mechanism for government procurement under RA 9184 is the posting of “milestone” events for a contract in the PhilGEPS website. The documents that must be posted on this website are the invitation to bid, bid bulletins, notice of award, contract agreement and notice to proceed. A “Certificate of Compliance” on these postings signed by Tayao and the new BAC chairman, Marilyn H. Celiz, dated June 7, 2013 show that these notices and contract agreement were not posted on the PhilGEPS website.  On the remarks column, there appeared a note that these “Cannot be posted due to changes in ABC as posted in the bid bulletins”.

These violations are “tell-tale signs” of a rigged bidding, the expert said. “One can readily see that there was an effort to conceal the bidding,” he said.

COA uncovers Mabilog’s effort to hide City Hall building anomaly

Jed Patrick E. Mabilog has time and again put up the excuse that the Commission on Audit has not issued a notice of disallowance on the anomalous P224 million supplemental works contract for the completion of the City Hall project in Iloilo City.

In its Annual Audit Report for the year ending December 31, 2011, the Commission on Audit revealed that its audit evaluation of the contract could not proceed because Mabilog has repeatedly — REPEATEDLY — refused to submit pertinent documents relative to the contract. In short, this has left COA blind on the entire transaction. But even then, the COA already saw that the transaction was fraught with irregularities.

Here’s the URL link to the full report of the COA for this and other findings:

COA exposes lie peddled by City Mayor Mabilog on City Hall project

When asked by media why the Iloilo City government didn’t conduct a competitive public bidding for the P260 million supplementary works contract for the City Hall project, the quick reply of City Mayor Jed Patrick E. Mabilog was that it was the Commission on Audit that advised him it was okay to do so. This letter from State Auditor IV Ofelia T. Demegillo disproves this claim. More than that, it exposes the blatant lies peddled by Mabilog:

Questions for COA (Part 2)

More than two years have now gone by since the anomalous bidding was conducted by the Iloilo City government for the City Hall building project with an approved budget for the contract (ABC) of P455 million. Apparently, the contractor, F. F. Cruz and Co./Freyssinet Filipinas joint venture, had already been paid its price tag of P368 million. The Commission on Audit (COA) did not find anything wrong with the bidding process and the project implementation.

With that irregularity having been allowed to go unmolested, COA, supposedly the official watchdog against corruption and fraud in government transactions, allowed the theft of more than a hundred million pesos. It validates the perception that COA has lost its sting, a toothless tiger that can hardly murmur its protest when powerful politicians snarl at its officials. It shows that its auditors play the role of the three monkeys — hear no evil, see no evil, speak no evil — to the detriment of the public interest.

But the negligence, incompetence and plain ignorance of COA auditors did not end there. In the middle of last year, City Mayor Jed Patrick E. Mabilog announced the supplementary works for the completion of the monumental anomaly would be awarded to the same contractor through negotiated procurement. In other words, the second contract wouldn’t undergo the competitive bidding process that is enshrined in Republic Act No. 9184, or the Government Procurement Reform Act.

Ostensibly, Mabilog wanted no delays in the project. At that time, he had wanted the building ready for inauguration when the city government celebrated its 74th charter day anniversary. It was apparent, however, he wanted to push the contract on a silver platter so that his bloated P260 million price tag won’t be reduced in a public bidding. That supplementary contract, as confessed by the city’s own project consultant, Conrado Goco, could be finished with just P45 million. Naturally, other bidders can offer to do it for P50 million and still reap big profits.

Efficiency and cost-cutting were apparently not in Mabilog’s agenda when he pushed for the award of the supplementary contract to the same contractor. He wasn’t inclined to make sure Ilonggo taxpayers are not burdened by extravagant, unnecessary expenses by its government. The obvious motivation is maximizing the “cut”, or the “kickback”. That purpose could not be achieved if the contract is undertaken through public bidding.

It was the media that raised the issue about a negotiated contract being inapplicable, hence, illegal, for the supplementary works. This forced Mabilog to seek the counsel of the COA if indeed he could not avail of a provision in RA 9184, particularly its Implementing Rules and Regulations, that defines the circumstances under which negotiated procurement is allowable. The phrase “adjacent and contiguous” is the general standard here, but it covers only similar scopes of work.

As Atty. Quintin Magsico, an expert on the government procurement law, put it, “you have to be able to compare apple with apple in computing the unit costs” for the new contract. In this case, that was not possible, because the scopes of work were entirely different from the original contract. The first contract involved civil works, or the structure itself, and involved concrete and steel bars. The second contract involved the electrical, plumbing, firefighting, data cabling, partitions and other components for the operation of an office building. There is no basis for price comparison.

I spoke with Ms. Ofelia T. Demegillo, the audit team leader of COA, and she disclosed the agency had advised Mabilog that the supplementary works would have to undergo public bidding. Basically, she validated our observation that the supplementary works didn’t meet the standards set by RA 9184 for negotiated procurement. After that meeting with COA, Mabilog also conceded defeat. He announced a “transparent and competitive public bidding” for Phase Two of the project.

The promised public bidding, however, never happened. Mabilog deceived his own constituents. He lulled the public into believing he would follow the law. The weeks went by, and nothing was heard from him. All of a sudden, sometime in October, workers of the project contractor were back at the site and resume their construction activities. The media noticed it, and asked Mabilog. Sheepishly, he admitted the contract had been awarded to the F. F. Cruz and Co./Freyssinet Filipinas joint venture.

What happened to the COA statement that the supplementary works did not fall under the “adjacent and contiguous” category? When probed by reporters, Mabilog and his chief legal officer Atty. Jose Junio Jacela said “COA advised us it was okay to do so.” Was there a change of heart on the part of COA?

COA owes the public an explanation. It can’t keep quiet on this issue. The first contract was a huge anomaly. The second contract is not yet fully paid, hence, there’s still an opportunity for COA to stop the hemorrhage of public funds. All in all, the city has earmarked P710 million for the project. About half of that amount represents the overprice. Will the COA give its stamp of approval?

If that happens, then we might as well seek the amendment of the constitution and disband COA. The City Hall project will be a monument to its ineptness in stopping corruption.

Questions for COA (Part 1)

It’s hard to get information from the Commission on Audit. Almost everything that it handles is shrouded in a veil of secrecy. But it doesn’t mean we will just resign to this sense of helplessness. We have to bring the case to the general public. If it doesn’t fulfill its constitutional mandate, then we could demand accountability through media. We need to keep the people informed.

With this in mind, I will list several questions for COA pertaining to the scandalous Iloilo City Hall project. The contractor has cleared the temporary fence in front of the project to get it ready for the formal turn-over to the city government. Now the facade of the building is fully visible to passers-by, and constituents can get a close-up look at what could be the most expensive City Hall in the country.

Let me mention that City Mayor Jed Patrick E. Mabilog must really be pissed off that the project wasn’t ready for inauguration last weekend. I know he had wanted to show off the building and deodorize the stink by inviting President Benigno Simeon Aquino III and U.S. Ambassador Harry Thomas. It’s a good thing they avoided legitimizing the anomalies by gracing the inauguration.

First, I would like to ask COA what it has done about the anomalous major revision of the project’s building plans and specifications about two weeks before the dropping of bids. When a project is advertised for bidding, its specifications are as complete as possible, with the approved budget for the contract (ABC) indicated. In this case, the original solicitation of bids called for a complete building, ready for occupancy, with all the amenities included. The estimated cost was P455 million.

Republic Act No. 9184 allows the agency undertaking the project to issue bid bulletins for “modifications” to clarify ambiguities or supply more detail to the plans to help the contractors make a responsive bid offer. There is no room for misunderstanding here. “Modification” means minor changes in the specifications, or tightening up the specs to avoid any miscalculation. It doesn’t change the essence of the project. It was supposed to be a complete building, RFO (acronym for ready for occupancy).

But the administration of then City Mayor Jerry P. Trenas introduced a gigantic anomaly when it revised the plans and specifications. It removed major components of the projects and left only the structural shell. In an instant, the project was changed from a complete City Hall to just its skeletal structure with outer walls. No elevators. No electrical and data wiring. No firefighting system. No elevated parking. No partitions and furniture. No airconditioning. And more.

By simply issuing a bid bulletin under the guise of a “modification”, the Trenas administration carved out nearly one-half of the original project. There was no justification. And it was done in treachery. Nobody outside the mayor’s office knew that the city government was putting up a half-finished City Hall.

Normally, such drastic changes in the project specifications, in which major parts or components are removed from the scopes of work, would require a reduction of the estimated costs. That’s only logical, because the removal of major scopes of work meant less costs for materials, labor and overhead.

Here lies the first big anomaly — the Trenas administration kept the ABC at P455 million. In effect, it was going to pay an amount equal to the whole for just half of the project. It is a giant swindle pulled off by the local chief executive.

It wasn’t surprising that the winning bidder submitted an offer for P368 million. Trenas was jubilant in announcing the award of the contract to F. F. Cruz and Co./Freyssinet Filipinas joint venture. It represented a savings of P87 million, he boasted. Indeed, such a drop in the winning bid should be cause for rejoicing for an agency that wants to implement a project with economy.

It was a false boast, however. With the revision of the project specs, the real cost estimate for the project should have been 50% lower, or P270 million. At P368 million, the contractor was still going to reap an overprice of P98 million, a huge bonanza that is clearly bound to be divided among top officials of the city.

The Bids and Awards Committee, apparently acting upon orders of Trenas, distorted the meaning of the word “modification” and dismembered the building to pave the way for a huge windfall. It smacks of dishonesty, fraud and simple corruption! I feel like puking at the calm demeanor of Trenas in claiming to have saved P87 million!

Will the COA pretend not to have seen anything or heard anything about this? Will it cover-up the glaring irregularity which makes a mockery of the law? Sadly, its actions don’t seem to point to safeguarding the public interest. It doesn’t seem inclined to stop the irregularity based on this unlawful “modification”. That transaction took place two years ago yet.

This is a clear case of graft and corruption that will haul Trenas and other officials of the city government before the Sandiganbayan. It’s not really too late for COA to prove it’s made of tougher stuff. It can expose this anomaly and file charges before the Ombudsman.

Iloilo City a ‘headache’ for COA

 

The Iloilo City government has allowed millions of pesos in unliquidated cash advances to remain in the hands of disbursing officers during the Trenas administration, which is considered a failing mark in the area of fiscal administration, the Commission on Audit (COA) reported in its 2010 annual audit report.

At the same time, the Trenas administration ignored Republic Act No. 9184 by procuring goods, infrastructure and consulting services valued at P32.9 million despite the absence of a Project Procurement Management Plan and Annual Procurement Plan, the same report said.

And the city government has registered poor performance in carrying out COA audit recommendations to strengthen fiscal administration, managing to implement only two such recommendations out of 17. Eight were partially implemented while seven were never put into effect, the COA AAR said.

The highlights of this COA report show a city government that was poorly managed and opened the doors for corrupt practices to flourish during the incumbency of Jerry P. Trenas as local chief executive, Iloilo Press Club president Rommel S. Ynion said.

“When a local government routinely ignores COA findings and brazenly violates the law in pursuing its projects and projects, then we have a serious problem in our hands,” Ynion, who is also Publisher of The News Today (TNT), said.

Ynion said the six-page Executive Summary of the COA report devoted 90% of its content to negative findings about the city government operations for the year ending December 31, 2009.

“We can’t allow a situation like this to continue,” he said. He will be filing a complaint before the Ombudsman to put Trenas, as local chief executive during that period, to task and hold him accountable, he added.

The COA report also discovered that the city allowed P24.2 million in trust fund accounts with the Land Bank of the Philippines (LBP) to remain dormant, which placed the LGU at risk of having to pay bank charges for dormant accounts and could jeopardize the implementation of vital projects and programs.

The COA report painted a discouraging picture of a “rudderless” city government in which “a mutinous crew did whatever they pleased with the captain of the ship not minding at all,” he said.

The failure, or outright refusal, of the city government to implement the COA recommendations for previous years worsened the situation, he added.

“The Trenas administration treated the COA like a rag,” he said.

Ynion said this COA report reinforces his belief that corruption became deeply-rooted in the city government during the Trenas years and “reached its pinnacle with the bidding for the seven-story city hall project.”

“This is very unfortunate,” he said. “The city leadership literally cultivated a culture of corruption that resulted in the biggest scandal in our community,” he added.

Ynion said the COA cannot be allowed to become a “toothless tiger” that is not respected by public officials.

If COA cannot enforce its own findings and recommendations, then he will seek the intervention of the Ombudsman to make sure the public interest is protected, he said.

Ynion has been in the forefront in exposing the alleged anomalies in the bidding and construction of the new City Hall project.

He has accused Trenas and Mabilog of defrauding the people in prosecuting what he described as a “grossly-overpriced contract worth P368 million” just for the structural shell of the building.

At that price, the construction cost of the building is P26,000 per square meter, which is already the upper limit of the industry standards for a complete medium-rise structure, he said.

“It’s like saying we are buying a Kia Pride car for the price of a Mercedes Benz,” he said.

Ynion said that he is also a contractor and he knows the business well.

The Iloilo Capitol stinks

The much-vaunted “reporma kag pagbag-o (reform and change)” campaign battle-cry of then gubernatorial candidate Arthur Defensor Sr. is quickly sinking into a garbage pit as details about anomalous transactions, particularly in the procurement of contracts, are coming out into the open.

Just this morning (April 13), Bombo Radyo reported the glaring irregularity in the Iloilo Capitol’s award of a P2.9 million contract for the waterproofing of its roofdeck and plug the cracks that have developed in this eight-year old magnificent building. The Bids and Awards Committee (BAC) headed by Provincial Administrator Raul Banias, M.D.,, tried to push a little known contractor, F and T Enterprises, to bag this contract despite its lack of experience and specialty license. As Bombo Radyo anchorman Don Dolido put it, “there is no option left for the BAC but cancel the award.” For the Capitol to go ahead would only draw suspicion that money has changed hands, grease money that is.

But the waterproofing contract is only one of the many anomalies that have been uncovered. It is clear the roadmap for reform and change foisted by Defensor when he was still a candidate had been discarded; an agenda for quick money-making deals have taken its place.

Former Board Member Domingo Oso has complained that the contract for janitorial services was also rigged. He claims the BAC didn’t adhere to the procurement rules mandated by RA 9184, or the Government Procurement Act. The contract was awarded to the third lowest bidder on the pretext that it had submitted the “highest-rated” offer. Oso points out that this term doesn’t exist in the manual for government procurement. It was also discovered that the winning bidder is an “ihada” of Banias during her wedding. Under the circumstances, it’s hard to ignore Oso’s complaint that the bidding was rigged.

There are many other cases which are just now being documented by Bombo Radyo, according to insiders. “The smoke is coming out,” an employee of the Iloilo provincial government familiar with the goings-on in the BAC. The media investigations are likely to lead into the discovery of more collusion in the bidding for drugs and medicines, as well as the security services for the Capitol.  “There’s a lot of rotting carcass that Banias is trying to hide, but can’t hide forever,” said another employee who told about several members of the Technical Working Group (TWG) quitting their posts because they don’t want to be associated with these anomalies.

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