COA: P602.768 million in equipment undelivered to PNP since 2016

The Philippine International Trading Corporation (PITC) has yet to deliver half a billion worth of equipment to the Philippine National Police (PNP) since funds were transferred to the procuring agency in 2016, the Commission on Audit (COA) reported.

In its 2021 audit report on the PNP, the COA said that out of the P1.348 billion in funds transferred  to the PITC  in 2016, “requested items amounting to P602.768 million remained undelivered and savings from completed projects were not returned/remitted to the BTr (Bureau of the Treasury) as of December 31, 2021.”

The PNP engaged PITC, as a servicing agency, to undertake its procurement as authorized under Section 53.6 of the revised implementing rules and regulations of Republic Act 9184 or the Government Procurement Reform Act.

The act states that “[i]n order to hasten project implementation, Procuring Entities which may not have the proficiency or capability to undertake a particular procurement, as determined by the Head of Procuring Entity concerned, may request other GOP agencies to undertake such procurement for them, or at their option, recruit and hire consultants or procurement agents to assist them directly and/or train their staff in the management of the procurement function.”

The COA said that in 2016, the PNP transferred P1,347,616,452.90 to the PITC for the procurement of various equipment.

But of the amount, the audit body said the PITC only delivered and liquidated requested items equivalent to P744,848,393.32 from 2018 to 2021.

This left a balance of P602,768,059.58 as of December 31, 2021.

Of this amount, the COA said P486,291,674.21 worth of items were "not yet delivered” and P56,059,825 worth of items were “delivered but not yet liquidated or distribution to PNP sites is still ongoing.”

The amount also included P60,416,560.37 worth of savings.

Undelivered items during the period included enhanced combat helmets, night vision goggles, brand-new utility trucks, sniper rifles, and explosive detection dogs.

“Although the fund was made available in CY 2016, the noted procurement backlogs in PITC occurred because contracts for the requested items were only awarded in 2021,” the COA said.

“The circumstances showed that in 2016, the PNP NHQ-BAC seemingly lacked proficiency and capability to procure the equipment, which paved the way to transfer the procurement activities to PITC. However, the decision was negated because an amount totaling P602,768,059.58 remained undelivered and/or unliquidated at year-end.”

The COA said that the completion of deliveries is expected within 2022.

However, it said that the “delays in the procurement by the PITC and the schedule of deliveries by suppliers affected the operations of the PNP and deprived its personnel of timely use of the equipment.”

The audit body said that it was informed that since 2017, the PNP has obtained a high absorptive capacity in all its procurements.

It said that by designating capable Bid and Awards Committee (BAC) members who frequently attended procurement-related seminars, the PNP was able to procure internally, thus reducing procurement backlogs and avoiding service fees.

The COA recommended that the PNP facilitate the timely delivery of all requested equipment for procurement and impose liquidated damages from PITC suppliers for the late deliveries, and refund or remit any unused amount/savings generated from completed projects and interests on the deposit of fund transfers to the BTr.

In response, the PNP said its Directorate for Logistics had sent a letter to the PITC in March “requesting the immediate schedule of delivery on the remaining PNP procurement projects from the supplier and also instructed the latter to impose liquidated damages for delayed projects.”

The COA said the PITC acknowledged receipt of the letter and noted the demand for timely delivery of all equipment from suppliers and the refund of all unused balance from projects that would be completed in 2022.

“An updated Status Report of the seven remaining PNP-PITC procurement projects as of March 28, 2022 from PITC was submitted by the DL to COA on April 5, 2022,” the audit body said. — DVM/VBL, GMA News