An investigation by the Commission on Audit (COA) has revealed irregularities in the award of P654.6 million worth of housing projects meant for people displaced by 2013’s Supertyphoon ‘Yolanda’. The funds were granted to a contractor who the COA found was not authorized by their license to take on such a large-scale project.
COA found that adjacent projects in three sites (Balangiga, Hernani, and Quinapondan) were divided into eight smaller contracts to “accommodate” the limitations of the developer. The still unnamed developer’s Philippine Contractors Accreditation Board (PCAB) license authorized it to secure projects worth only up to P100 million, a far cry from the total P654.6 million the housing project was allocated.
Had the contracts not been split to adjust for the limited license of the developer, the total cost for each of the three sites would have exceeded the developer’s allowable limit. These would have been P133.2 million for Balangiga, P286.6 million for Hernani, and P234.7 million for the development in Quinapondan.
Despite the division of the contract, COA is classifying the act as a violation by the contractor of its P100-million limit. Further, COA is finding the National Housing Authority (NHA) in violation of the Government Procurement Reform Act. The splitting of the projects to adjust to the developer’s license limitations is a blatant show of favor in the ideally competitive bidding for a project meant for the public’s best interest.
COA also found that 10 Yolanda Permanent Housing Program projects, worth a total of P852.7 million, were progressing far behind the expected rate. This is, according to COA, because the NHA awarded contracts to developers ill-equipped in manpower, equipment, and simply operation scale to handle these large projects. State auditors are asking why the NHA did not immediately disqualify for contractor, following government procurement rules.
These findings were released by COA in its 2017 annual audit report. The irregularities continue, as COA also found that the contractor ended up delaying the project. Status reports show that the contractor’s deadline was extended 33 times, causing a total of 2,761 days in delay. Still, despite these extreme measures to uphold the awarded contract, the projects have not been finished.
According to COA, these delays are ground for termination of the contract. On Nov. 15, 2017, the NHA terminated nine out of the 10 contracts awarded for the Yolanda Permanent Housing Program.
In the same 2017 annual report, COA urged the NHA to sue its erring officials who allowed these contracts to be approved, as well as file a formal complaint against the still unnamed contractor of eight housing projects in the towns of Balangiga, Hernani and Quinapondan in Eastern Samar.
“They said lists of manpower and equipment were not sufficient to undertake the 10 projects awarded to only one contractor for the construction of 2,559 units under the YPHP,” the COA said. COA’s investigation also found that the contractor merely submitted a “list of personnel” and “list of equipment” for the projects in 2014.
Auditors also questioned the NHA’s failure to collect damage payments from the contractor as penalty for the delays. COA is recommending the
The NHA responded to COA, admitting oversight and failure to properly monitor the contracts. Problems with the developer were only discovered after the issuance of site memorandum reports that called for increases in worker deployment. The NHA admitted to failing to “fully monitor” the whether the contractor was capable of delivering on the project, and what their real manpower and equipment capabilities were.
Eastern Samar Representative Ben Evardone has sought investigation into the irregularities of the government resettlement project in his district. He welcomes the COA’s findings as a way to move forward, especially for victims of Yolanda.
“All responsible persons and entities should really be made accountable to give justice to the victims of typhoon Yolanda. The massive anomalies surrounding the implementation of Yolanda housing projects are totally unacceptable and a huge insult to the victims,” he said.