COA flags DPWH over P118 billion of delayed, non-implemented projects

The Department of Public Works and Highways (DPWH) has accumulated P118 billion worth of projects that were either delayed or not implemented in violation of the Procurement Law and and agreed contracts, the Commission on Audit (COA) said.

GMA News Online has contacted the DPWH for a statement but has yet to receive a reply as of this posting.

COA’s annual audit report on DPWH showed the projects consisted largely of the following:

• not completed within the specific contract time (P107 billion)

• suspended (P8 billion)

• unimplemented or yet to be started (P2 billion)

• terminated (P218 million)

State auditors attributed the delays to suspension orders, time extensions, and variation of orders issued by the DPWH offices. COA said the DPWH and its consultants failed to consider these during the preliminary engineering study on the viability of the projects:

• typhoon or unfavorable weather condition

• peace and order situation

• road right-of-way issues

• pending excavation permits or clearances from local government units (LGUs), and permits for cutting trees from Department of Environment and Natural Resources (DENR) and clearance from other agencies

• modified plans, design, and works program

• modified and realigned location or unavailable project site

• insufficient workforce or manpower provided by the contractors

• lack of equipment and transfer of equipment from one site to another by contractors with two or more projects

• unavailable or difficulties in hauling construction materials

• scarcity of materials from the locality

• site inaccessible to heavy equipment

• inadequate supervision and monitoring

• late release of funds

“The causes of delay may have been outside the control of the department, such as typhoon and unfavorable weather condition for which time extension may be approved by the proper authority,” the commission noted.

“However, except for typhoon or unfavorable weather condition, all issues enumerated above as well as the necessity of coordination with the LGUs and other concerned agencies are factors which are unintentional but procedural and consequential issues,” it said.

“These procedural and consequential issues should have been considered and resolved during the preliminary engineering study on the viability of the project and pre-construction activities,” it added.

State auditors noted the absence of coordination mechanisms in place as a vital part of the feasibility and preliminary engineering studies hampering project completion and resulting in inefficient implementation of the programs or projects.

COA said that 157 of the 3,784 delayed infrastructure projects, valued at P5.6 billion, incurred delays that exceeded the 10% allowable slowdown specified under the original or revised contract period.

The DPWH, however, did not rescind or terminate such contracts or imposed damages against the contractors involved as required by the law.

COA has called on the DPWH to take the following steps:

• ensure full coordination with other government agencies—LGUs, the community, and private utilities—to achieve effective and synchronized planning and implementation

• impose liquidated damages against contractors for each day of delay and initiate termination or rescission of contract when the liquidated damages reach 10% and negative slippages of more than 15% as a result of the contractor’s fault or negligence

• impose sanctions on erring DPWH personnel who may be remiss in their obligations

• consider disqualifying or blacklisting contractors

• initiate immediate take-over process of terminated projects to facilitate completion within the specified timeframe

According to COA, the DPWH would be able to minimize project delays by taking the following actions:

• carry out detailed engineering to ensure issues such as relocation of informal settlers and project viability are properly addressed during the feasibility or preliminary engineering studies 

• reviewing and evaluating the Program of Work to ensure that project designs and estimates are properly prepared and that all phases of the projects are covered

• directing the Bids and Awards Committee to properly verify and evaluate during post-qualification the operating conditions of equipment and other construction requirements

• strictly monitor and supervise projects implemented by different DPWH offices

In response to COA’s findings, the department told state auditors that DPWH management has been sending demand letters and notices for contractors to fast track project completion at the soonest possible time and to observe project timelines during its implementation.

The DPWH said it issued a memo for all concerned offices to monitor and evaluate all remaining on-going contracts, and that efforts such as planning, coordination, periodic inspection, and close coordination are being made.

It assured state auditors that the department will send letters to contractors with negative slippage to accelerate the implementation, and that there will be constant monitoring and coordination to settle right-of-way issues involving suspended projects.

Other steps taken by DPWH in response to COA report were:

• better preliminary detailed engineering to address right-of-way issues prior project implementation

• conduct meetings with project engineers to supervise closely their projects and coordinate with LGUs and DENR for projects where trees are in the way

• coordinate meetings with contractors to expedite and complete projects

• issue work suspension orders with time extension for delays caused by right-of-way problems, bad weather, and peace and order

• impose liquidated damages in the final billing

COA noted, however, that projects with right-of-way issues should not be implemented until the issues have been resolved. —VDS, GMA News