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DBM cancels P727-M contract for 500,000 PPEs over delayed delivery, flags links to blacklisted firm

The Department of Budget and Management (DBM) has canceled a P727-million contract with Ferjan Health Link Philippines, Inc. for the purchase of personal protective equipment amid the COVID-19 pandemic due to the contractor’s alleged delayed delivery and overpricing. 

Budget Undersecretary Lloyd Christopher Lao made the disclosure during the DBM budget hearing before the Senate finance committee on Monday. 

“The trigger [for cancellation] was their delayed delivery…and the changes in the prices that we initially entered into were significantly higher compared with those available in the market. We canceled on their delay,” Lao said.

“We considered the delay of delivery and the fact that we can purchase it with a new supplier given the new market prices. We can buy the same number of PPEs at a cheaper price, Lao added.

Ferjan Health Link Philippines, Inc. was supposed to deliver 500,000 sets of PPEs to the Armed Forces of the Philippines warehouse in Camp Aguinaldo within 45 days upon issuance of purchase order. 

Each PPE from Ferjan Health Link Philippines, Inc. is worth P1,455—a set that includes shoe cover, sterile gloves, apron, clean gloves, coverall, head cover and gown.

Lao, however, conceded that the contract was only canceled last Friday after they discovered that one of Ferjan’s Health Link Philippines, Inc.’s stockholders is the sole proprietor of blacklisted supplier Ferjan Health Link Enterprises. 

“We checked with the Securities and Exchange Commission, and one stockholder of Ferjan, Inc. is the same owner of Ferjan Enterprise which is a sole proprietorship. Once we got the data, we reached out to GPPB (Government Procurement Policy Board) for guidance, and we canceled the contract last Friday,” Lao said.

“GPPB is also making some changes. The corporation whose one of stockholders is the owner of the a blacklisted supplier under sole proprietorship should be blacklisted [too],” Lao added.

The DBM official also assured the public that the government did not make advance payment to Ferjan Health Link Philippines, Inc.

“The items have not been delivered and we did not make advance payment. No money has been spent by the government for this,” Lao said.

Senate Minority Leader Franklin Drilon welcomed it.

“That is good to know,” Drilon added.

The contract was awarded to Ferjan Health Link Philippines, Inc. last June 19. —KG, GMA News