COA: Construction of NGC perimeter roads disadvantageous to gov't

By JC Locsin

BACOLOD CITY -- The Commission on Audit (COA) Sub-Cluster III in Negros Occidental led by Shiela S. Velmonte Portal along with its Team Member Loida C. Arabelo and Supervising Auditor Arlene D. Togonon had issued recently an Audit Observation Memorandum relative to the P15.64 million appropriation by the city government for the construction of the perimeter roads in the New Government Center despite its inclusion in the bid of Hillmarc's Construction Corporation.


Under the COA findings which was only received by the City Mayor's Office last June 1, 2009, it was stated that the appropriation for the perimeter roads is grossly disadvantageous on the part of the government because said appropriation was already included in the Terms of Reference, Bid Data Sheet and likewise the financial bid of the winning bidder.

Record shows that on September 22, 2008, the Bids and Awards Committee (BAC) published the first Invitation to Apply for Eligibility and to Bid (IAEB) for the design and build of the proposed P400 million Bacolod City New Government Center.

COA further cited the terms of reference (TOR) and the Bid Data Sheet that Hillmarc's prepared, that road network is under the detailed architectural and engineering designs of site development. Record further revealed that on December 11, 2006, upon the recommendation by the BAC declaring Hillmarc's bid to be the responsive to the requirements of the City for the new government center, the Honorable Mayor then made a request to the Sangguniang Panglungsod for a special session to grant him the authority to enter into contract for the construction and site development of the Government Center and at the same time issued the "Notice of Award" to Hillmarc's for the P398,957,121.01 contract to construct the Government Center.

This was accepted by Hillmarc's in its letter of December 18, 2008 to the City Mayor. While Hillmarc's accepted the award on December 18, 2006 to construct the Government Center which included the site development within the donated lot and which of course included the perimeter roads, the OIC City Engineer, thru BAC Secretariat, in December 29 of the same year, sought the approval for the implementation of the construction of east road projects labor component by administration.

COA recommended that the City Mayor justify in writing why the perimeter roads which were part and parcel of the construction and site development of the P400 million Government Center was undertaken at separate cost and by administration and the cost not demanded from Hilmarc's Construction Corporation and also recommended that the Local Chief Executive will demand from Hillmarc's Construction Corporation the total cost already expended and the cost to complete the perimeter roads constructed by the city within the 5-hectare donated property and recommended to withhold the 10 percent retention fee of said Contractor.

COA furthermore recommended that the Sangguniang Panglungsod will justify in writing why despite their earlier approval of the appropriation for the perimeter roads, the honorable body even approved and ratified the contract between the city government and Hillmarc's without requiring an exception clause or deduction of the cost of perimeter roads from the total due to Hillmarc's in the contract.

With regard to the City Engineer's Office, they were also ordered to submit in writing the justification why despite failure of Hilmarc's to construct the perimeter roads as embodied in the contract, they accepted the government center project as complete with plans and specification knowing fully well that the construction of the said perimeter roads were undertaken by the office and most of the members of the Technical Working Group - Government Center of the BAC were personnel of the same office.

This is double payment of government transaction since the construction of the perimeter roads is already included in the original contract of the New Government Center.

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