COA questions selection process for Kaliwa Dam contractor

The Commission on Audit questioned the selection of the contractor for the P12.2-billion New Centennial Water Source-Kaliwa Dam project in Infanta, Quezon.

In an eight-page Audit Observation Memorandum dated June 10, 2019, the state audit body said that the technical working group of the Metropolitan Waterworks and Sewerage System failed to observe proper bidding and vetting procedures before it awarded the project to China Energy Engineering Corp. in December 2018.

“We recommend that [MWSS] management demand explanation from the members of the TWG for acceptance of the two bidders/contractors in spite of non-compliance with vetting/pre-qualification requirements,” the memo stated.

“Also, hold responsible the TWG officers for failure to conduct vetting of the project and or request for replacement of the two not qualified bidders, which deprived the MWSS to select the most qualified contractor,” it added.

The memorandum, which was prepared by officer-in-charge audit team leader Rency Meryl Marquez and officer-in-charge supervising auditor Ma. Nancy Uy and addressed to MWSS administrator Reynaldo Velasco, noted that the TWG of the MWSS shortlisted and eventually accepted the bid applications of three Chinese firms namely CEEC, Consortium of Guangdong Foreign Construction and Power China Ltd. even if two of them failed to meet the pre-qualification requirements set earlier by the MWSS for the project.

The Audit Commission found that one of the shortlisted candidates did not have the required permits, while another did not submit a bid within the project budget.

“However, during the opening of bids and in the evaluation of minimum Eligibility Requirements of the contractors, Consortium of Guangdong Foreign Construction Co. Ltd. was found to be non- complying,” COA said.

The consortium was found to lack a mayor’s and business permit, Philippine Contractors Accreditation Board (PCAB) license, Philippine Government Electronic Procurement System (PhilGEPS) Platinum Certificate, and a validated Single Largest Completed Contract (SLCC).

On the other hand, Power China Ltd. submitted a bid of P13.042 billion which is higher than the approved budget for the contract by P842 million.

“As a result, only China Energy Engineering Corp. Ltd qualified which is questionable considering that the two bidders were disqualified in the 1st and 2nd stages of the process due to the seemingly intentional purpose of the bidders not to comply with the TWG (technical working group) requirements,” the state audit body said.

“In summary, it can be deduced that the two bidders/contractors were included merely to comply with the ‘at least three bidders’ requirement as stated under the Procurement Law. Likewise, the procurement of the project is with the semblance of a competitive bidding when in reality, it is a negotiated contract from the inception of the bidding process,” it added.