COA: Four PNR projects worth P1B violated procurement law

At least four Philippine National Railways (PNR) projects worth over P1 billion violated the procurement law, the Commission on Audit (COA) said.

In its annual audit report on PNR for 2019 , state auditors noted that they found that the P1 billion worth of projects did not comply with the procurement law during a review on PNR’s 33 contracts.

The four projects were:

• procurement of train sets (standard gauge diesel multiple unit) amounting to P921 million
• retrofitting of piers and abutments of various bridges (Naga Division) worth P44.5 million
• procurement of Computerized Maintenance Management System worth P40 million and
• supply and delivery of rail wood sleepers worth P31 million

COA said the contractor on the P921-million project for the procurement of train sets — Chinese firm CRRC Corporation Limited — failed to submit post-qualification bidding requirements, which should have disqualified it from winning the bid.

According to COA, The post-qualification requirements that the contractor failed to submit included:

• proof that it is a corporation or association of a country whose laws or regulations grant reciprocal rights or privileges allowing Filipino nationals to participate in public procurement in their country since CCRC is a foreign contractor
• sworn statement proving a similar right exists in favor of Filipinos in its country;
• Class "A" Eligibility Requirement of SEC Certificate of Registration
• detailed breakdown of the Approved Budget of the Contract (ABC) including the detailed breakdown of estimates and/or unit cost analysis/derivation duly signed by the Head of the Procuring Entity; and
• warranty certificate duly signed by the authorized representative of the winning bidder

As for the P44.5-million contract for retrofitting of piers and abutments of various bridges (Naga Division), COA raised a red flag over a significant discrepancy between the bid price in words and the bid price in figures.

“The BAC adopted the lower amount of P44,552,435.24 — the bid price in words. However, the Bill of Quantities attached as a supporting document to the Bid Form showed the grand total of P44,852,435.24; the bid price in figures,” COA said.

“There were no arithmetical corrections made during bid evaluation,” COA added.

Lastly, COA said that the PNR’s Bids and Awards Committee (BAC) approved the bids of contractors on the P31-million contract for the supply and delivery of rail wood sleepers  and the P40-million Computerized Maintenance Management System project even if the contractors did not have a PhilGEPS Platinum Registration—a Class "A" Eligibility Requirement.

“In accepting the justification provided by the bidders regarding the absence of the PhilGEPS Platinum, the PNR BAC exercised its discretion which is an action expressly prohibited in Section 30 of the Procurement law,” COA said.

“If the BAC believes that absence of the PhilGEPS Platinum Certificate is justified, it should have resolved the matter during the request for reconsideration stage, and not during the eligibility examination of bids,” it added.

Given the findings, COA recommended that PNR should strictly observe the provisions of the Revised Implementing Rules and Regulations of the procurement law, which include:

• Section 30 which prohibits the BAC to exercise its discretion in the evaluation of bids;
• Section 32.2 which states that the bid price in words shall prevail over the bid price in figures; and
• Section 34.2 which states that failure to submit any of the post-qualification requirements on time, or a finding against the veracity thereof, will disqualify the bidder for award.

COA said that the PNR management did not submit its written response on the findings.

“We will issue an answer to this,” PNR Assistant General Manager and spokesperson Ces Lauta said in a Viber message.

“Remember these are observations which when not answered will need to be responded in the exit conference. No exit conference yet,” Laut said. —with Ted Cordero/KBK/BM, GMA News